NPS changes 2026: PFRDA asks pension funds to rename and restructure MSF schemes within 30 days; check new rules

The Pension Fund Regulatory and Development Authority (PFRDA) has directed pension funds to modify, restructure or reclassify existing Multiple Scheme Framework (MSF) schemes to align them with its new standardised framework for classification and presentation of NPS schemes.

Under the regulator’s circular dated 28 August 2026, pension funds have been given 30 days to bring existing MSF schemes into a single prescribed category and rename them according to the new naming convention.

What pension funds have to do

PFRDA said existing MSF schemes whose equity allocation mandate spans more than one MSF category must be modified, restructured or reclassified so that each conforms to a single prescribed category. Pension funds must submit the revised details to the regulator within 30 days of the circular.

The same 30-day deadline applies to renaming existing MSF schemes under the prescribed naming convention.

PFRDA has also capped the number of schemes that a pension fund can offer at two schemes under each category under each Tier. Where a pension fund currently has more than two schemes in the same category, those schemes will have to be merged, subsumed or suitably restructured within 45 days.

The regulator has said this process must be carried out after informing subscribers and following the prescribed process for winding up a scheme.

New NPS schemes will need prior approval

The changes also apply to the launch of new MSF schemes. PFRDA has mandated that every new MSF scheme will require prior approval from the Authority.

Pension funds launching a new scheme will have to provide information, documents, declarations and undertakings as specified by PFRDA. The schemes will also have to comply with the NPS investment norms under the applicable Master Circular and other directions issued by the regulator.

The regulator has further prescribed greater disclosure requirements. Every scheme must display a Risk-o-meter, while pension funds must maintain an “NPS Scheme Essentials” document for each MSF scheme.

The document will cover details including the scheme's objective, target segment, asset allocation, risk level, benchmark, vesting period, charges and fees, taxation, risk management and winding-up provisions.

Each scheme will also have to be benchmarked against relevant market indices to facilitate transparent performance disclosure.

What happens if an NPS scheme is wound up

PFRDA has also specified what happens to subscribers if an MSF scheme is wound up.

Subscribers will be given a choice to move to another scheme. If a subscriber does not exercise the choice, the subscriber will be migrated to the Life Cycle 50 – Moderate (10E/55Y) Scheme of the same pension fund under Tier I.

The circular also allows pension funds to offer optional value-added services such as income payout solutions, annuity-related services, succession planning and other retirement-planning solutions. Such services cannot change the investment objective or risk profile of the underlying scheme.

Importantly, PFRDA has discontinued the distinction between Common Schemes and MSF Schemes with effect from 28 August. Going forward, all NPS schemes will be classified and governed under the standardised framework prescribed in its separate circular issued on the same date.