PFRDA Launches Multiple Scheme Framework Under NPS: Here’s What It Means for You

Planning for retirement has just become more flexible for India's private sector workforce. The Pension Fund Regulatory and Development Authority (PFRDA) has launched a new feature within the National Pension System (NPS), giving private-sector employees, self-employed professionals, freelancers, and gig workers more control over their retirement savings. The initiative, called the Multi-Scheme Framework (MSF), took effect on 1 October 2025 and aims to make retirement planning more adaptable.

The new framework is designed for subscribers in the non-government sector, including private employees, self-employed professionals, freelancers, and platform-based or gig workers. It enables investors to diversify their NPS portfolios by managing multiple investment schemes within a single account.

Why the New Framework Has Been Introduced

The non-government segment of the NPS has shown steady growth recently, with more participants and increased assets. To support this trend, PFRDA introduced the MSF to allow subscribers to access and manage multiple schemes within a single account. This change is designed to meet the diverse needs of investors by offering more options and customisation.

How the New System Works

Under the new framework, each subscriber, identified through their Permanent Account Number (PAN), can hold and operate several schemes within their NPS account. Previously, individuals could only manage one scheme per tier; now, they can allocate contributions across various schemes offered by different Pension Funds. For example, a subscriber might choose a high-risk, equity-focused scheme for growth, alongside a more conservative, stable option - all within one account.

New Schemes and Investment Options

Pension Funds are now permitted to develop specialised schemes for specific groups, such as self-employed professionals, corporate employees, and gig workers. Each scheme will include at least two variants: one with moderate risk and another with high risk. The high-risk schemes can now invest up to 100 per cent in equities, a significant increase from the previous limit of 75 per cent for active choice investors.

What Existing Subscribers Should Know

Those already participating in the NPS can continue with their existing plans, now called "Common Schemes". While they cannot transfer existing savings into the new schemes, they can direct all future contributions into one or more of the new options. Switching between schemes under the MSF will be allowed after 15 years or at the time of normal exit, with the option to revert to common schemes at any time.

Cost and Transparency

The cost structure remains low, with annual charges limited to 0.30 per cent of assets under management. Pension Funds that attract more than 80 per cent of new subscribers to a scheme will be eligible for a 0.10 per cent incentive during the first three years or until the scheme exceeds 50 lakh subscribers. All schemes are required to publish an "NPS Scheme Essentials" document, detailing their objectives, asset allocations, risks, and fees to ensure transparency.

Better Monitoring and Access

Subscribers will receive consolidated reports from the Central Recordkeeping Agency and can access all their NPS accounts through their PAN via the Account Aggregator System, making it easier to manage their investments.

Who Can Use the New Framework?

The Multi-Scheme Framework is available only for non-government subscribers, including private-sector employees, self-employed professionals, gig workers, and all Indian citizens under the 'All Citizens of India' model. Government employees are not covered by this change.

Why It Matters

This new framework marks a significant step in modernising India's pension system. It provides greater flexibility, improved diversification, and more control over retirement savings. For younger professionals and the self-employed, it offers opportunities for higher equity exposure and better returns, making the NPS a more versatile and future-ready option for retirement planning.