PFRDA board has given in principal approval to the framework.
A scheduled commercial bank can now independently set up a pension fund to manage National Pension System (NPS), Pension Fund Regulatory and Development Authority (PFRDA) has said.
PFRDA board has given in principal approval to the framework. This has been done “with the objective of strengthening the pension ecosystem, enhancing competition and safeguarding subscriber interests,” a statement by PFRDA said.
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, it added.
Revised IMF structure for Pension Funds
The pension regulator has also revised the Investment Management Fee (IMF) structure for Pension Funds. This will be effective from April 1. 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,” it said.
The rate will be in the range of 0.04 per cent to 0.12 per cent depending upon the slab of assets under management. The revision has been done 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, the statement added.
Further, 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 formalisation 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,” the statement said.
New appointments
In another decision, the board appointed former Chairman of SBI, Dinesh Kumar Khara as new Chairperson of the NPS Trust Board. Apart from Khara, Swati Anil Kulkarni (Former Executive Vice President, UTI AMC) and 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) have also been appointed as trustees.
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Published on January 1, 2026