**Executive Summary**
This press release announces policy reforms by the Pension Fund Regulatory and Development Authority (PFRDA) to promote the sustainable growth of the National Pension System (NPS). Key changes include permitting Scheduled Commercial Banks (SCBs) to become sponsors of Pension Funds, appointing new trustees to the Board of NPS Trust, and revising the Investment Management Fee (IMF) structure for Pension Funds, effective April 1, 2026. These reforms aim to strengthen the pension ecosystem, enhance competition, and safeguard subscriber interests.
**Key Points / Main Content**
* **Scheduled Commercial Banks as Sponsors:**
* PFRDA has approved a framework to allow SCBs to independently set up Pension Funds for NPS management.
* Eligibility criteria for SCBs are based on net worth, market capitalisation, and prudential soundness.
* Detailed criteria will be notified separately and will apply to both new and existing Pension Funds.
* **Appointment of NPS Trust Chairman and Trustees:**
* Dinesh Kumar Khara has been appointed as the Chairperson of the NPS Trust Board.
* Three new Trustees have been appointed to the Board of the NPS Trust:
* Dinesh Kumar Khara, Former Chairman, State Bank of India
* Swati Anil Kulkarni, Former Executive Vice President, UTI AMC - Trustee
* 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.
* **Review of Investment Management Fee:**
* PFRDA has revised the Investment Management Fee (IMF) structure for Pension Funds, effective April 1, 2026.
* The revised slab-based IMF introduces differentiated rates for Government and Non-Government sector subscribers and shall also apply to schemes under the Multiple Scheme Framework (MSF).
* IMF rates for Non-Government Sector subscribers (NGS) based on slabs of AUM (in Rs. Crores):
* 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) remains unchanged at 0.015 per cent.
* 0.0025 per cent of AUM will be passed on to the Association of NPS Intermediaries (ANI) to support outreach and financial literacy.
**Impact Analysis**
**Stakeholder: Scheduled Commercial Banks (SCBs)**
* **Impact:** SCBs meeting the eligibility criteria can now establish Pension Funds, increasing market participation and competition.
* **Action Required:** SCBs must review the detailed eligibility criteria (to be notified separately) and determine if they meet the requirements to become sponsors of Pension Funds.
**Stakeholder: NPS Subscribers**
* **Impact:** Subscribers should benefit from a strengthened pension ecosystem, enhanced competition, and revised Investment Management Fees, potentially leading to improved long-term retirement outcomes.
* **Action Required:** Subscribers should be aware of the revised IMF rates for Pension Funds, effective April 1, 2026.
**Stakeholder: Pension Funds**
* **Impact:** Pension Funds will be subject to a revised Investment Management Fee structure.
* **Action Required:** Pension Funds must adjust their fee structures according to the new guidelines starting from April 1, 2026.
**Stakeholder: Association of NPS Intermediaries (ANI)**
* **Impact:** ANI will receive a portion of the Annual Regulatory Fee to support awareness, outreach and financial-literacy initiatives.
* **Action Required:** ANI will use the additional funding to support 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 pension funds in India, making policy reforms related to NPS.
National Pension System (NPS): A pension scheme in India regulated by PFRDA. The policy reforms aim to promote its growth.
Scheduled Commercial Banks (SCBs): Banks that are now permitted to become sponsors of Pension Funds to manage NPS.
NPS Trust: The trust that manages the assets of the National Pension System.
Association of NPS Intermediaries (ANI): An association that receives funds to support awareness and outreach efforts related to NPS.
Press Release
PFRDA Introduces Policy Reforms to Promote Sustainable Growth of NPS
1. Scheduled Commercial Banks can also become Sponsors of PFs
PFRDA ‘s 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, enhancing competition and safeguarding subscriber
interests. The proposed framework seeks to address existing regulatory constraints that had
limited bank participation till now, while introducing clearly defined eligibility criteria based
on net worth, market capitalisation and prudential soundness in line with RBI norms, to 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.
2. Appointment of Chairman of the Board of NPS Trust and Trustees
PFRDA has appointed three new Trustees on the Board of the 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.
3. Review of Investment Management Fee for PFs and Augmenting Financial Sources
Association Of NPS Intermediaries (ANI) to perform NPS Outreach
In order to align with evolving realities, aspirations of Indian Citizens, International
benchmarks and the objective of expanding coverage across corporate, retail and gig-economy
segments while safeguarding subscriber interests, PFRDA has revised the Investment
Management Fee (IMF) structure for Pension Funds with effect from 1 April 2026. The revised
slab-based IMF introduces differentiated rates for Government and Non-Government sector
subscribers and 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 the remain
same. Under Non-Government Sector, the following shall be the structure for IMF:
IMF rates for Non-Government
Slabs of AUM (in Rs. Crores)
Sector subscribers (NGS)
ई – 500, टावर – ई, पाचवाां तल, वर्ल्ड टरेड सेंटर, नौरोजी नगर, नई दिल्ली – 110 029
िूरभाष: 91 – 11 – 40717900, वेबसाइट: www.pfrda.org.in
E – 500, Tower – E, Fifth Floor, World Trade Center, Nauroji Nagar, New Delhi – 110 029
Phone: 91 – 11 – 40717900, Website: www.pfrda.org.inUp 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
shall 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.
ई – 500, टावर – ई, पाचवाां तल, वर्ल्ड टरेड सेंटर, नौरोजी नगर, नई दिल्ली – 110 029
िूरभाष: 91 – 11 – 40717900, वेबसाइट: www.pfrda.org.in
E – 500, Tower – E, Fifth Floor, World Trade Center, Nauroji Nagar, New Delhi – 110 029
Phone: 91 – 11 – 40717900, Website: www.pfrda.org.in