What is NPS Sanchay? Check eligibility, withdrawal rules and investment details

India's pension regulator has introduced NPS Sanchay, a simplified version of the National Pension Scheme (NPS), aimed at providing pension to workers in the informal sector. This segment employs nearly 90% of the country’s workforce but remains largely outside formal retirement coverage.

The Pension Fund Regulatory and Development Authority (PFRDA) has launched the scheme under the All Citizen Model and Micro Savings Framework (MSF) to make retirement savings easier for individuals with limited access to financial advisory services or those find it hard to make investment choices.

“The default design of this scheme is intended to reduce complexities associated with the selection of investment options and the determination of asset allocation, while also addressing constraints arising from limited advisory support at the last-mile level,” the regulator said in a circular issued on May 6.

The scheme was put into effect immediately, with the regulator asking all stakeholders to start necessary preparatory actions.

Who can open an NPS Sanchay account?

Any Indian citizen between 18 and 85 years of age can open an NPS Sanchay account. They have two options to submit the application:

• Through a Point of Presence (PoP) or PoP-Service Provider
• Through the online platform

The subscribers should mandatorily complete standard KYC formalities and submit required documents under the existing NPS registration rules, according to the circular.

How NPS Sanchay investments work?

The insurance regular also noted that the investment pattern under NPS Sanchay will follow the same guidelines that are currently applicable to government-sector-linked NPS and pension schemes. These include:

• UPS/NPS schemes for Central and State Governments
• Corporate CG
• NPS Lite
• Atal Pension Yojana (APY)

The scheme will also be available across all pension funds registered with the authority.

Withdrawal and exit rules

PFRDA said that the existing exit and partial withdrawal rules applicable under NPS regulations will also apply to NPS Sanchay subscribers. As a result, withdrawals and exit requests under the scheme will continue to be governed by the standard NPS regulatory framework already in force.

Charges and contribution structure

The insurance regulator clarified that the charge structure for NPS Sanchay will remain similar to existing common NPS schemes such as:

• NPS (All Citizen)
• NPS Vatsalya
• NPS Lite

Additionally, NPS Sanchay subscribers are allowed to change pension fund managers and their asset allocation or investment choices. The flexibility will remain aligned with existing rules applicable under the All Citizen Model of NPS.

What does the new scheme aim to do?

The minimum initial contribution and subsequent investment requirements under NPS Sanchay will remain aligned with the existing contribution norms of NPS unless revised separately by the authority in the future.

The scheme has been introduced at a time when a large section of workers in India’s informal sector continue to remain outside formal retirement planning systems, largely due to irregular income patterns, limited financial awareness, and lower access to organised pension products. Such workers include gig workers, daily-wage workers and self-employed individuals.

With NPS Sanchay, PFRDA aims to simplify the retirement savings for this category of workers. The scheme reduces the need for subscribers to actively select investment options or decide asset allocation, making the pension enrolment and investment process simpler for first-time investors and individuals outside the formal salaried workforce.