The new subscriber-specific scheme design is part of PFRDA’s broader Multiple Scheme Framework (MSF), which will take effect from October 1, 2025.
“Available to all new and existing subscribers through both Tier I (retirement-focused) with a vesting period and Tier II (voluntary savings), wherein the vesting period is optional,” per the circular.
According to the PFRDA circular issued on September 16, 2025, each new scheme will come up with at least two options. First, a moderate-risk variant and second, a high-risk variant. While selecting the high-risk option, you will be allowed to allocate up to 100% of investments in equities. This will give subscribers the chance to pursue higher returns. However, pension funds will also have the discretion to introduce a low-risk variant for conservative investors.
“Each category shall have two risk variants – Moderate and High. Risk-profiling of subscribers shall be based on income or socio-economic parameters to enable informed scheme selection,” per the circular.
PFRDA, in its circular, said the move is intended to make retirement planning more flexible and personalised, while aligning NPS with global best practices. Until now, subscribers were limited to fewer investment choices, with strict caps on equity exposure. However, the new framework will give more flexibility and the ability to match their retirement savings plan to their income level, occupation, and risk appetite.
For self-employed and digital economy workers, who often lack access to employer-backed retirement benefits, the new scheme design could open the door to more suitable options. Corporate employees, meanwhile, may benefit from schemes that integrate both employer and employee contributions more effectively.
The circular stated that charges may be levied and recovered from the scheme launched under this framework, up to 0.3% of the AUM per annum, by the respective PF. These charges include the IMF payable to the PF, as prescribed by PFRDA, as well as distribution and awareness charges to the PoP, also as determined by the PF and specified by PFRDA.
Additionally, custodian charges, CRA charges, and NPS Trust charges, as prescribed by PFRDA, will apply on top of these charges. PFs will be entitled to an extra incentive of 0.10% of AUM per annum for schemes launched under this framework, if 80% of the subscribers are new enrolments under NPS, as per the circular.
According to the PFRDA, while pension funds will have more flexibility in designing these schemes, they must still adhere to strict investment norms and transparency rules. Each scheme will be benchmarked against market indices, and subscribers will receive clear disclosures about risks, charges, and performance.