The Indian Pension Fund regulator allowed fund administrators to introduce custom -made schemes (NPS), allowing 100% stock portfolios to be launched for non -governmental subscribers
“The framework removes diversification limitation and provides subscribers a greater extent for reconciliation of their investment with their developing goals to retire and building wealth,” said the circular regulatory and development office for the pension fund (PFRDA) on Tuesday.
The PFRDA command will come into force on October 1.
Within the framework with multiple systems (MSF), the regulatory regulatory body stated that NPS subscribers will now be able to hold and manage multiple programs through a permanent number of pension account (PRAN), compared to current rules where subscribers can have only one investment option to the level associated with one CRA (central recording agency).
The circular stated that fund managers will be able to propose programs adapted to specific subscribers, such as programs for self -employed experts, digital economics (platform) workers or employees of the company where employers are facilitated.
Also read | NPS is an attractive product due to its low cost: PFFDA chairman
The pension regulator also stated that each scheme may have 2 variants: mild and high risk, with a high risk option to allow up to 100% allocation of equity. Pension funds can also introduce low -resistant variants at their discretion. The schemes will have a minimum period of demonstration of 15 years with the possibility to get off at the age of 60 or at the time of retirement.
“By allowing us to start a folded scheme, we would not only be able to offer 100% allocation of our own capital for young investors, but also to invest in multiple assets to create an alpha that is important for long -term wealth (MD), which will allow us to keep cash that will allow us to make greater market timing.
Sriram Iyer, MD & CEO, HDFC Pension, said the pension fund will also be able to establish hybrid schemes adapted to a specific set of people such as women at the age of 30, and mix capital, corporate bonds, government bonds and alternative investments.
Download before turning 60
Iyer from HDFC Pension said that the current period for existing NPS subscribers is at the age of 60, which means they can collect 60% of their corpus tax and place the rest in the annual products generating revenue. However, with the new MSF schemes, if the customer starts investing at the age of 30, they will be able to collect 60% of their money for 45 (15 -year -old) and the rest in Anuit. They may also decide to hold and expand it to 75 or move to another scheme, added Iyer.
Also read | Do not think of your savings – move to NPS 60 years ago and keep more money
Shukla from the Axis pension fund said that within the MSF, after 15 years of locking or at the age of 60, 60% Corpus can be downloaded without tax, while this option is only available after the subscriber turns 60 years. You can only download 20% of the corpus tax and delay the rest. This is a huge difference, offers greater liquidity and flexibility
More charges
The pension regulator also allowed pension fund administrators (PFMS) to charge up to 30 basis points, with additional motivation of 10 basis points if it is able to attract more than 80% of new subscribers to a particular system. Currently, PFM can charge between 3 and 9 basis points as fees for the management of the fund and the presence entities (NPS distributors) charge a small fee separately.
“Until now, the cost of fund management would have formed approximately 5-6 basis points, but now it has increased to 30 basis points, which is almost five times. We remain much lower than expenditures in other products such as mutual fund, life insurance, etc.
What do experts say
This is the first big change, because Sivasubramanian Ramann took over the accusations as PFRDA chairman in June 2025.
Ramneek Kundra, the main investment director (CIO) from the DSP pension fund, said it was the first main overwork of the NPS architecture and a welcome step towards developing the extent of pension funds in India.
Kulin Patel, CEO and Partner in Ka Pandit Consultants and Mathematics, said: “My initial opinion is that MSF is a significant and welcome reform that offers PFMS flexibility for innovation and subscribers the ability to adapt to their accumulation phase.
Also read | Sovereign Wealth, pension funds to anchor the story of India despite global nervousness
AMIT GOPAL, a pension consultant based in Bengalur, said it would have to be regulated and supervised well with the advent of higher fees, the risk of incorrect sale will appear in pension products. Questions like why to sell traditional NPs when there is a more lucrative MSF, comes to mind. Hopefully it will not go the way of the mutual fund, with too many schemes with little differentiation. One hopes that the differences will not be merely allocation of assets, but also a proposal for benefits.
(Tagstotranslate) amit gopal
