NPS Scheme: National Pension Scheme (NPS) subscribers under Scheme A (Tier-1) are allowed to switch to any other asset classes until December 25, 2025. In an important update, the Pension Fund Regulatory
and Development Authority (PFRDA) has announced to merge Scheme A (Tier-1) with Schemes C and E.
After a comprehensive review of the scheme’s performance and structure, and keeping your long-term retirement interests in focus, it is proposed by PFRDA to merge Scheme A with Schemes C and E. This step is intended to provide a more stable, efficient, and rewarding investment experience for subscribers, PFRDA said in the notice.
Those NPS Subscribers who had opted for Scheme A in Tier I (Active Choice) can exercise additional choice of switching their wealth from Scheme A into any other asset classes of their choice without any
additional cost till 25th Dec 2025.
What Are The Objectives?
Scheme A had a relatively small corpus and limited investment avenues.
Post-merger, contributions of investors will be part of larger and more diversified portfolios under Schemes C and E, helping reduce concentration risk and enhance stability.
Certain assets under Scheme A involve longer lock-in periods.
“Larger schemes offer better flexibility and portfolio management efficiency, which supports more consistent long-term returns and a better balance between risk – reward for retirement
investment,” PFRDA said in the notice.
Merging Scheme, A with Schemes C and E, PFRDA added, ensures that your NPS contributions are invested in larger, diversified, and more liquid portfolios, enabling smoother management and more efficient long-term growth.
The four asset classes are
Asset Class E – Equity and related instruments
Asset Class C – Corporate debt and related instruments
Asset Class G – Government Bonds and related instruments
Asset Class A – Alternative Investment Funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc
