From 1 October 2025, PFRDA’s Multiple Scheme Framework (MSF) is effective for non-government NPS subscribers. MSF lets pension funds offer persona-targeted schemes (low / moderate / high risk) and — for non-government MSF high-risk schemes — permits equity exposure up to 100%. Separately, PFRDA has issued an exposure draft proposing wider changes to exit and withdrawal rules; that draft is under consultation.
Benefits
- Greater choice & personalization: Multiple scheme options let subscribers pick products matched to occupation, age or risk appetite.
- Higher growth potential for long horizons: High-risk MSF schemes can deploy up to 100% equity, which may boost long-term returns for young, risk-tolerant investors.
- Improved disclosures & safeguards: MSF requires standard “scheme essentials”, risk-meters and regulator approval to reduce mis-selling and improve comparability.
- More flexible exit options (proposed): The exposure draft proposes higher lump-sum thresholds, systematic redemptions and relaxed partial-withdrawal rules for small balances. These are proposals and not yet final.
Key details (concise)
- Effective date: 1 October 2025.
- Who can use 100% equity: Non-government NPS subscribers choosing MSF high-risk variants; existing common schemes remain unchanged.
- Scheme design: Pension funds may offer low / moderate / high-risk variants; each scheme must publish a standardized “NPS Scheme Essentials” disclosure and obtain regulator approval.
- Charges & governance: MSF includes disclosure and fee-governance requirements — compare total cost (fund + operational fees) before choosing.
- Exit/withdrawal draft: The exposure draft proposes higher lump-sum limits, systematic redemptions and broader partial-withdrawal rules; these are under consultation.
Conclusion
MSF is a major NPS reform: non-government subscribers can now access high-risk schemes with up to 100% equity, offering higher long-term return potential for risk-tolerant, long-horizon investors. Proposed exit/withdrawal relaxations may ease access for small balances but are not final—read each scheme’s disclosures, match risk to your horizon, and wait for final regulator rules before making major changes.
FAQs
1. When did MSF start?
Ans: 1 Oct 2025.
2. Can government employees opt for 100% equity now?
Ans: No. The 100% equity option applies to MSF schemes for non-government subscribers; government schemes follow separate rules.
3. Is annuitization abolished?
Ans: Not yet. The exposure draft proposes relaxations for small balances, but annuity requirements for larger corpuses remain until final rules change.
4. Who should consider a 100% equity MSF scheme?
Ans: Young, long-horizon, high-risk-tolerant subscribers who can accept equity volatility. Not suitable for near-retirees or those needing predictable income.
5. What should I check before switching?
Ans: Read the scheme essentials, confirm vesting/switch rules, compare total charges and check tax treatment (Tier-I vs Tier-II).
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