PFRDA Drops The Mic: Introducing 100% Equity with New Schemes in NPS

October 1, 2025 which was known as the International Day of Older Persons and now officially also known as NPS Diwas, marked a turning point for India's pension landscape. The Pension Fund Regulatory and Development Authority (PFRDA) rolled out the Multiple Scheme Framework (MSF), transforming how non-government subscribers can build their retirement corpus.

If you're among the millions who invested in NPS, or are considering it, here's everything you need to know about this new reform.

Understanding the Multiple Scheme Framework

Developed under Section 20(2) of the PFRDA Act, 2013, the Multiple Scheme Framework allows subscribers to invest in multiple NPS schemes using a single PAN, instead of being confined to one pension fund manager and one scheme per asset class.

For example: Your PAN becomes your unique identifier across the entire NPS ecosystem. You can hold up to three PRANs (Permanent Retirement Account Numbers), one with each Central Record Keeping Agency (CRA). Within each PRAN, you can invest in multiple schemes, with each scheme investment functioning as an "account" under your PRAN.

Previously, you were locked into a single investment choice per tier with one CRA. That constraint is now history.

The framework is available to all non-government subscribers including both individual and corporate NPS accounts, through Tier I (retirement-focused with a mandatory vesting period) and Tier II (voluntary savings with optional vesting period).

The Headline Changes: NPS with 100% Equity Allocation

This is the reform that's got everyone talking, and for good reason.

NPS subscribers can now allocate up to 100% of their contributions to equity schemes. Until September 30, 2025, you were capped at 75% equity exposure. For younger investors with decades until retirement, this was a frustrating limitation.

The new high-risk scheme variants can have equity exposure up to 100%, while moderate-risk variants offer balanced approaches. Low-risk variants are optional and left to the pension fund's discretion.

To put this in perspective: As of August 2025, NPS assets under management stood at ₹15 lakh crore, with equity schemes accounting for ₹2.46 lakh crore. Over the past five years, NPS AUM has compounded at an impressive annual rate of almost 27%. With 100% equity allocation now permitted, we could see a significant shift in asset flows from traditional fixed-income instruments to equity-oriented products.

Important Rules and Restrictions You Must Know

Before you rush to open multiple PRANs, here are some important guardrails you need to understand:

The 15-Year Vesting Period

1. New schemes under MSF come with a minimum vesting period of 15 years. You have the option to exit at age 60 or at the time of retirement, whichever comes first.

Switching Rules During Vesting Period

1. During the vesting period, you can switch from new MSF schemes to common (old) schemes, but not between different new schemes.

2. After 15 years or at normal exit, the gates open, and you can move funds across all Section 20(2) schemes.

3. You cannot switch between different new schemes during the vesting period. However, free switching between your present scheme and common schemes is permitted.

4. The rationale behind the vesting period? Since scheme performance may influence your switching decisions during the vesting period, PFRDA wants to ensure informed, long-term decision-making rather than reactive, short-term moves.

Scheme Winding Up Protocol

1. If a pension fund winds up any scheme, you'll get a choice to migrate to any common or Section 20(2) scheme. If you don't exercise this choice, you'll be automatically migrated to Tier I under Auto Choice LC 50 of the same pension fund.

The List Of New Schemes: What's Actually on the Menu

Now that you understand the framework, let's talk about what pension fund managers have cooked up. PFRDA has approved twelve distinct schemes, each with its own personality. Here's your guided tour through the new NPS new schemes.

The All-In Equity Believers (High Risk)

If you're the type who wants to take up high risk apps and believes retirement is a little far away to play it safe, these schemes are calling your name.

1. Aditya Birla's Secure Retirement Equity Fund (Tier 1) and DSP's Long Term High Equity Fund (Tier 1) both offer up to 100% equity exposure, targeting corporate and salaried professionals who want maximum equity participation.

2. UTI's Wealth Builder (Tier 1&2) is going after young and mid-career professionals who want midcap action. This isn't your typical large-cap heavy fund, they're allocating 80-100% to companies outside the BSE 100 index. The scheme goes up to 100% equity and is available in both Tier 1 and Tier 2, giving you flexibility on lock-in periods.

3. Kotak's Kuber Equity Fund (Tier 1) is specifically tailored for self-employed individuals who want aggressive growth. Equity exposure ranges from 80-100%, and here's a thoughtful touch if you change your mind, you can switch back to Kotak's normal NPS equity fund. It's like having an exit ramp on the highway.

4. For those who want the full 100% equity experience, you've got options from the heavy hitters. SBI's Jeevan Swarna Retirement Yojana (Tier 1) (75-100% equity) casts a wide net for corporate employees, salaried folks, self-employed, and HNIs are all welcome.

5. TATA's Smart Retirement Fund (Tier 1) is particularly interesting if you're an entrepreneur, consultant, or freelancer. With 70-100% equity, they also sprinkle in up to 30% G-Secs, 30% corporate bonds, and up to 5% alternative assets. It's aggressive, but with some guardrails.

6. HDFC's Equity Advantage Fund (Tier 1) pushes the envelope at 85-100% equity with a target audience that includes subscribers who can stomach that level of market exposure.

The Moderate-Risk Zone

Maybe you want equity growth but also diversify your portfolio. These balanced schemes give you meaningful equity exposure without going full throttle.

1. Axis's Golden Years Fund (Tier 1) is the standout here, and not just because of its 65-100% equity range. Here's the kicker: it comes with personal accident or disability cover up to ₹50 lakhs, provided by Aditya Birla. That's unique in the NPS universe. If you're above 18 and want growth plus protection, this deserves a close look.

2. LIC's Smart Balance (Tier 1) targets long-term investors with high risk appetite; with a 65-85% equity allocation, and that's quite balanced by NPS standards. They keep a maximum 35% in debt, which provides some cushioning during market turbulence.

3. ICICI Prudential's My Family My Future Plan (Tier 1) is exclusively for women, with 50-85% equity exposure. It's recognition that women investors often have different financial timelines and responsibilities, and generic products don't always fit.

4. HDFC's Surakshit Income Fund (Tier 1) is laser-focused on India's burgeoning digital economy workforce for gig workers, platform-based workers, delivery partners, freelance designers. With 55-75% equity, it acknowledges that irregular income needs a strategy that's aggressive enough for growth but stable enough for peace of mind.

The Conservative Corner (Low Risk)

Not everyone wants to ride equity rollercoasters, especially if you're closer to retirement.

1. SBI's Akshay Dhara keeps it moderate at 25-50% equity which is enough to beat inflation over time, but with substantial debt allocation to reduce volatility.

2. HDFC's Surakshit Income Fund (Tier 2 version) goes even more conservative at up to 25% equity. Since it's Tier 2, there's no mandatory lock-in, making it suitable for digital economy workers who might need liquidity while still wanting some retirement planning exposure.

Built for Every Type of Investor

The MSF isn't a one-size-fits-all solution. Pension fund managers will now design schemes for specific personas that includes self-employed professionals, gig economy workers, corporate employees with employer contributions. Each category comes with moderate and high-risk variants.

This persona-based approach is brilliant. A software developer working for a startup has different needs than a seasoned consultant with irregular income. Now, schemes can be tailored to match these distinct profiles

What You Should Do Now

Whether you're just discovering NPS or have been contributing for years, here's your prctical action plan to make the most of these reforms.

If You're a New NPS Subscriber

1. Open Your NPS Account: Get started with your retirement journey and sign up on PensionBox to open your NPS account in just a couple of minutes.

2. Book a Free 1-on-1 Retirement Advisory Call: Connect with PensionBox certified retirement advisors for a personalized session. Assess your risk profile honestly and remember, going 100% equity isn’t always the right choice. Your ideal mix depends on your age, income stability, other investments, and comfort with market volatility.

3. Create Your Free, Personalized Retirement Plan: Our advisors will help you understand which NPS scheme suits your goals and how much you should invest to build your dream retirement corpus.

4. Invest Smartly and Stay Consistent: Choose between the old or new NPS schemes based on your risk appetite. Once invested with PensionBox, relax and let time and compounding grow your wealth.

If You're an Existing NPS Subscriber

1. Track Your NPS Effortlessly: Link your existing NPS account on PensionBox and monitor all your retirement investments in one place.

2. Review and Rebalance with Expert Guidance: Schedule a free 1-on-1 call with our certified advisors to review your current allocation. Does your portfolio still match your financial goals and risk profile? The new NPS schemes might offer better diversification and we’ll help you evaluate that.

3. Evaluate Before You Switch: Your existing NPS schemes remain safe and active. Take your time to explore the new options with our experts before making changes.

4. Personalize Your Retirement Plan: Create a customized retirement plan to determine the best scheme and ideal contribution amount for your goals.

5. Test and Transition Smoothly: You don’t need to shift everything at once. Try investing in new NPS schemes with smaller allocations to see how they perform before fully committing.

The Bottom Line

The Multiple Scheme Framework represents the most significant change in NPS since its inception. With ₹15 lakh crore in assets growing at 27% annually, NPS has already proven it's a serious wealth-creation tool, not just a government savings scheme.

The new framework positions NPS alongside global pension systems that offer multiple pension fund managers, diverse strategies, and genuine subscriber choice. It respects your intelligence and acknowledges that different people need different solutions at different life stages.

October 1, 2025, didn't just bring rule changes, but it brought a philosophy shift. From "one size fits all" to "build what works for you." From mandatory conservatism to optional aggression. From limited choice to genuine freedom.

The old NPS was reliable, getting you to your retirement with safety. The new NPS is where you can actually customize your retirement investments based on where you're going and how fast you want to get there.

The framework is live. The new schemes will be launching on PensionBox very soon. The only question left is: How will you use this newfound freedom to build the retirement you actually want?

Disclaimer:

This article is for informational purposes only and should not be considered investment advice. Consult with a PensionBox certified retirement advisor before making investment decisions. Past performance does not guarantee future returns.