A key change allows Scheduled Commercial Banks (SCBs) to independently sponsor and set up Pension Funds (PFs) to manage NPS assets. Until now, regulatory constraints had limited direct bank participation. Under the proposed framework, banks will need to meet eligibility criteria linked to net worth, market capitalisation and prudential soundness in line with Reserve Bank of India (RBI) norms. PFRDA said detailed norms will be notified separately and will apply to both existing and new pension funds. The move is expected to widen choice for subscribers and strengthen the pension fund ecosystem.
PFRDA has also reconstituted the Board of Trustees of the NPS Trust. Former SBI Chairman Dinesh Kumar Khara, former UTI AMC executive Swati Anil Kulkarni, and Digital India Foundation co-founder Arvind Gupta have been appointed as trustees. Khara has been designated as the Chairperson of the NPS Trust Board, a step aimed at strengthening governance and oversight.
Another significant reform relates to pension fund costs. PFRDA has revised the Investment Management Fee (IMF) structure for pension funds, effective April 1, 2026. While IMF for government sector subscribers under certain schemes remains unchanged, non-government sector subscribers will move to a slab-based fee structure, with rates declining as assets under management increase. This is expected to benefit subscribers over the long term by lowering costs as funds scale up.
The Annual Regulatory Fee remains unchanged, though a portion will now support awareness and financial literacy initiatives through the Association of NPS Intermediaries.
PFRDA said these reforms aim to create a more competitive, well-governed and resilient NPS framework, supporting wider coverage and improved retirement security for Indian citizens.
