It has become potentially easier for participants of the National Pension System (NPS) to choose a suitable scheme due to the implementation of a new approach. The Pension Fund Regulatory and Development Authority (PFRDA) has established a new structure for classifying various NPS schemes and presenting related information.
Under this system, investors will be provided with unified information about the schemes, including the proportion of investments in equities, risk level, expected returns, commissions, and benchmarks.
Furthermore, starting from October 1, 2026, a one-time registration fee of ₹200 will be charged for opening a new NPS account through a Point of Presence (PoP) for every Permanent Retirement Account Number (PRAN). This amount will not be deducted from the account in a lump sum; Central Recordkeeping Agencies (CRAs) will charge it quarterly, deducting ₹50 per unit. This amount will be transferred to the PoP in the month following the completion of the account opening quarter.
PFRDA defined new NPS scheme categories in a circular issued on August 28, 2026. The new system provides for the distribution of schemes into five categories, primarily based on the proportion of investments in equities. This will allow investors to more easily understand what percentage of their funds can be directed to the stock market and what associated risk exists before choosing a scheme.
It is important to note that each scheme must belong to only one category; for example, a scheme cannot simultaneously belong to Category B and Category C. This will simplify the process of comparing different NPS schemes.
NPS platforms are now required to present scheme information in a prescribed manner. Investors will first see the type and category of the scheme, and then they can obtain details about the corresponding pension fund. Based on this data, they can compare different schemes.
The goal of the new rules is to provide investors with a complete picture of the scheme. High returns may be accompanied by increased risk. Therefore, investors should evaluate not only past returns but also indicators such as the proportion of equity investments, risk, and performance relative to the benchmark.
The main objective of the new system is to standardize the method of displaying the name, classification, and information about the scheme. These new classification rules do not apply to government sector accounts. For other existing NPS account holders, a change in scheme name or category does not imply automatic adoption of any new investment decision by them. Nevertheless, they should closely monitor any changes, restructuring, or merger of their scheme.