**Executive Summary**
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced policy reforms to promote the sustainable growth of the National Pension System (NPS). These reforms include enabling Scheduled Commercial Banks (SCBs) to independently set up Pension Funds, reviewing the Investment Management Fee (IMF), and appointing new Trustees. The revised IMF structure goes into effect on April 1, 2026.
**Key Points / Main Content**
* **Pension Fund Sponsorship:**
* Scheduled Commercial Banks (SCBs) can now independently set up Pension Funds to manage NPS.
* Eligibility criteria based on net worth, market capitalization, and prudential soundness will be defined.
* Detailed criteria will be notified separately and apply to new and existing Pension Funds.
* **Investment Management Fee (IMF) Review:**
* The Investment Management Fee (IMF) structure for Pension Funds is revised to safeguard subscriber interests.
* Revised slab-based IMF introduces differentiated rates for Government and Non-Government sector subscribers.
* Applies to schemes under the Multiple Scheme Framework (MSF), with the MSF corpus being counted separately.
* IMF for Government Sector employees remains the same under Composite Scheme or Auto Choices and Active Choice G 100s.
* Structure for IMF for Non-Government Sector subscribers (NGS):
* Up to 25,000 (Rs. Crores): 0.12%
* Above 25,000 & Up to 50,000 (Rs. Crores): 0.08%
* Above 50,000 & Up to 1,50,000 (Rs. Crores): 0.06%
* Above 1,50,000 (Rs. Crores): 0.04%
* Revised IMF structure is effective from April 1, 2026.
* **Annual Regulatory Fee (ARF):**
* ARF remains unchanged at 0.015 percent payable by Pension Funds to PFRDA.
* 0.0025 percent of AUM will be passed on to Association of NPS Intermediaries (ANI) to support NPS outreach.
* **Board of NPS Trust:**
* PFRDA appointed three new Trustees on the Board of NPS Trust:
1. Shri Dinesh Kumar Khara, Former Chairman, State Bank of India
2. Ms. Swati Anil Kulkarni, Former Executive Vice President, UTI AMC - Trustee
3. Dr. Arvind Gupta, Co-Founder and Head, Digital India Foundation and Member of the National Venture Capital Investment Committee under the Fund of Funds Scheme managed by SIDBI.
* Shri Dinesh Kumar Khara has also been designated as the Chairperson of the NPS Trust Board.
* **NPS Outreach:**
* A proportion of AUM will be passed on to Association of NPS Intermediaries (ANI) to carryout NPS Outreach.
**Impact Analysis**
**Scheduled Commercial Banks (SCBs)**
* **Impact:** Can now establish Pension Funds independently, potentially increasing revenue streams and market presence.
* **Action Required:** Evaluate eligibility criteria, prepare application, and set up Pension Funds according to PFRDA guidelines.
**Pension Funds**
* **Impact:** Revised IMF structure impacts revenue; ARF remains unchanged. Some AUM passed on to ANI.
* **Action Required:** Adapt to new IMF rates and adjust financial planning accordingly. Implement measures to support NPS outreach.
**NPS Subscribers**
* **Impact:** May benefit from increased competition and potentially lower fees due to new SCB entrants. Benefit from safeguard due to revised IMF structure.
* **Action Required:** Review their investment options and make informed decisions based on the changes.
**Association of NPS Intermediaries (ANI)**
* **Impact:** Increased funding to support outreach and awareness programs.
* **Action Required:** Plan and execute coordinated awareness, outreach and financial literacy initiatives under PFRDA's guidance.
Key Entities Referenced
Pension Fund Regulatory and Development Authority (PFRDA): The primary regulator for the pension sector in India, responsible for introducing and implementing policy reforms related to NPS.
National Pension System (NPS): The pension scheme which is being reformed through the announced policies. These reforms are aimed at making it more sustainable and inclusive.
Investment Management Fee (IMF): Fee structure revised by PFRDA for pension funds to safeguard subscriber interests.
Association of NPS Intermediaries (ANI): Entity that will receive a proportion of AUM to support coordinated awareness, outreach and financial-literacy initiatives under PFRDA's overall guidance.
Scheduled Commercial Banks (SCBs): Banks permitted to independently set up Pension Funds to manage NPS, subject to eligibility criteria.
Ministry of Finance
PFRDA introduces policy reforms to promote
sustainable growth of NPS
The framework seeks to address existing regulatory
constraints that had limited bank participation until now
Scheduled Commercial Banks can also become sponsors of
PFs;
Review of Investment Management Fee (IMF) for PFs
PFRDA appoints three new Trustees on the Board of NPS
Trust
A proportion of AUM to be passed on to Association of NPS
Intermediaries (ANI) to carryout NPS Outreach
प्रव तथ: 01 JAN 2026 12:25PM by PIB Delhi
The Pension Fund Regulatory and Development Authority's (PFRDA) board has approved, in principle, a
framework to permit Scheduled Commercial Banks (SCBs) to independently set up Pension Funds to
manage NPS, with the objective of strengthening the pension ecosystem. This shall enhance competition
and safeguard subscriber’s interests. The proposed framework seeks to address existing regulatory
constraints that had limited bank participation till now. By introducing a clearly defined eligibility criteria
based on net worth, market capitalisation and prudential soundness in line with RBI norms, it will ensure
that only well-capitalised and systemically robust banks are permitted to sponsor Pension Funds. The
detailed criteria will be notified separately and will apply to both new and existing Pension Funds.
PFRDA has appointed three new Trustees on the Board of NPS Trust, pursuant to the selection process
initiated by PFRDA.
The following are the new Trustees to the Board of PFRDA -
1. Shri Dinesh Kumar Khara, Former Chairman, State Bank of India
2. Ms. Swati Anil Kulkarni, Former Executive Vice President, UTI AMC - Trustee
3. Dr. Arvind Gupta, Co-Founder and Head, Digital India Foundation and Member of the National
Venture Capital Investment Committee under the Fund of Funds Scheme managed by SIDBI.
Shri Dinesh Kumar Khara has also been designated as the Chairperson of the NPS Trust Board.In order to align with evolving realities, aspirations of the public, international benchmarks and the
objective of expanding coverage across corporate, retail and gig-economy segments, PFRDA has revised
the Investment Management Fee (IMF) structure for Pension Funds to safeguard subscriber interests with
effect from 1 April 2026. The revised slab-based IMF introduces differentiated rates for Government and
Non-Government sector subscribers which shall also apply to schemes under the Multiple Scheme
Framework (MSF), with MSF corpus being counted separately. The IMF for Government Sector
employees under Composite Scheme or those opting for Auto Choices and Active Choice G 100s remains
the same. Under Non-Government Sector, the following shall be the structure for IMF:
Slabs of AUM (in Rs. Crores) IMF rates for Non-Government Sector
subscribers (NGS)
Up to 25,000 0.12%
Above 25,000 & Up to 50,000 0.08%
Above 50,000 & Up to 1,50,000 0.06%
Above 1,50,000 0.04%
The Annual Regulatory Fee (ARF) of 0.015 per cent payable by Pension Funds to PFRDA remains
unchanged; Out of which, 0.0025 per cent of AUM will be passed on to the Association of NPS
Intermediaries (ANI) to support coordinated awareness, outreach and financial-literacy initiatives under
PFRDA’s overall guidance.
As formalization in the Financial, and Pension sectors of the Nation continue to grow and influence the
financial aspirations of every Indian citizen, PFRDA expects these policy reforms to help the Subscribers
and Stakeholders to access a more competitive, well-governed and resilient NPS ecosystem, leading to
improved long-term retirement outcomes and enhanced old-age income security.
*****
NB/PK
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