New Delhi: The National Pension System (NPS) is set for a major change from October 1, 2026, with the pension regulator introducing a new framework to make schemes easier for subscribers to understand and compare. The Pension Fund Regulatory and Development Authority (PFRDA), through a circular dated August 28, has standardised the classification and presentation of NPS schemes.
The changes include five new equity-based categories, clearer risk classification and a one-time ₹200 onboarding charge for new NPS registrations made through Points of Presence (PoPs). The new framework is aimed at giving investors more information about equity exposure, risk, returns, charges and benchmarks before they select a pension scheme.
Five new equity categories for NPS schemes
One of the biggest changes is the introduction of five categories based on the proportion of equity a scheme can hold. This is intended to make the risk and investment profile of schemes easier to identify.
Under the new framework, Category A schemes will have an equity allocation of 80-100 per cent. These will be classified as aggressive growth schemes and carry a very high risk.
Category B schemes will have 60-80 per cent equity exposure and will be classified as high growth, with a high level of risk.
Category C will cover schemes with 35-60 per cent equity and will be classified as balanced growth, carrying medium risk.
Category D will have 10-35 per cent equity exposure and will be classified as conservative.
Finally, Category E will have 0-10 per cent equity exposure and will be classified as debt-oriented.
PFRDA has also specified that a scheme cannot have an equity mandate that overlaps two categories. For instance, a scheme cannot have an equity range extending across both Category B and Category C. It must fall within one prescribed category.
The categorisation could make it easier for NPS subscribers to compare schemes offered by different pension funds and select an option according to their individual risk appetite.
₹200 NPS onboarding charge from October 1
Another important change concerns new NPS subscribers registering through a Point of Presence.
From October 1, 2026, a one-time onboarding charge of ₹200 for each Permanent Retirement Account Number (PRAN) will apply.
However, subscribers will not see the entire ₹200 deducted at once. The charge will be recovered in instalments of ₹50 per quarter through cancellation of units by the Central Recordkeeping Agencies (CRAs).
The amount recovered will subsequently be paid to the relevant Point of Presence in the month following the quarter in which the onboarding is completed.
For investors considering opening an NPS account, the new charge therefore becomes an additional cost to factor into the initial registration process.
NPS platforms to provide more information
PFRDA is also changing how NPS schemes are presented to subscribers. Platforms will have to follow a standard sequence while displaying schemes, allowing investors to first understand the scheme type and category before selecting a pension fund.
Investors will be able to compare several important parameters, including the scheme name, pension fund, launch date, historical returns, benchmark and benchmark returns.
Information on charges, riskometer and assets under management will also be available as part of the standardised presentation.
The move is significant because investment decisions based solely on past returns can overlook the level of risk involved. A scheme with higher historical returns may also have greater equity exposure and therefore greater market-linked risk.
By displaying returns alongside benchmarks and risk information, the new framework is intended to help subscribers make more informed comparisons.
What existing NPS subscribers should know
The new framework also changes the earlier distinction between common schemes and schemes launched under the Multiple Scheme Framework (MSF). PFRDA has brought NPS schemes under the new standardised classification and presentation framework.
However, the new classification rules do not apply to NPS accounts tagged to the Government sector.
For other existing subscribers, a change in the name or classification of a scheme does not automatically mean that they need to make a fresh investment decision.
Nevertheless, investors should review the updated scheme name, equity category, riskometer, charges and benchmark when their pension fund updates its offerings.
If an existing scheme is restructured or merged, subscribers may need to examine the changes more carefully to understand whether the investment profile has been altered.
Greater transparency for pension investors
The latest NPS framework is essentially aimed at simplifying information for investors rather than changing the fundamental purpose of the pension system. By clearly indicating equity exposure and risk levels, PFRDA wants subscribers to have a better understanding of what they are choosing.
The five-category structure also provides a common framework through which investors can compare schemes across pension funds. At the same time, the new ₹200 onboarding charge will apply to new PRAN registrations through Points of Presence from October 1.
For existing investors, the key step will be to check how their pension fund maps existing schemes into the new categories and whether any restructuring or merger has taken place.
Overall, the changes are designed to make NPS more transparent and easier to navigate, while encouraging subscribers to consider risk, charges, benchmarks and long-term performance instead of looking at returns alone.