In a major reform aimed at boosting retirement savings, the Pension Fund Regulatory and Development Authority (PFRDA) has approved 100% equity allocation under the National Pension System (NPS) for non-government subscribers, effective October 1, 2025.
This move gives private-sector employees, freelancers, and platform-based workers the freedom to invest entirely in equity—unlocking higher long-term returns and greater portfolio flexibility.
What’s New Under the Multiple Scheme Framework (MSF)
The PFRDA’s new Multiple Scheme Framework (MSF) allows pension fund managers to design customized schemes tailored to different subscriber profiles. Key features include:
- 100% equity exposure for high-risk variants
- Moderate and low-risk options also available
- Minimum vesting period of 15 years
- Exit flexibility at age 60 or retirement
- Multiple schemes under one PRAN (Permanent Retirement Account Number)
Subscribers can now hold more than one investment strategy, compared to the earlier rule of one scheme per tier.
Who Benefits Most
This reform is especially beneficial for:
- Young professionals seeking aggressive growth
- Self-employed individuals with flexible retirement goals
- Corporate employees with employer co-contributions
- Digital economy workers looking for long-term wealth creation
Fund managers can now create schemes for specific personas—like women in their 30s, gig workers, or salaried professionals—with tailored mixes of equity, bonds, and alternative assets.
Why This Matters
- Higher returns: Equity historically outperforms debt over long periods
- Diversification: Subscribers can mix schemes based on risk appetite
- Flexibility: Withdraw 60% tax-free after 15 years or at retirement
- Innovation: Pension funds can now offer hybrid and composite schemes
This marks a shift from the earlier cap of 75% equity exposure, giving investors more control over their retirement planning.
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Final Takeaway
The PFRDA’s decision to allow 100% equity NPS plans is a bold step toward modernizing India’s retirement landscape. For non-government subscribers, it means greater freedom, higher growth potential, and personalized pension planning—all under a regulated, low-cost framework.