NPS subscribers will be able to invest 100% in equities, the scheme launching on October 1st.
From October 1, NPS Subscribers Can Invest 100% in Equities Under New Multiple Scheme Framework
New Delhi, September 17, 2025: In a landmark move, the Pension Fund Regulatory and Development Authority (PFRDA) has announced a new investment option under the National Pension System (NPS), allowing subscribers to allocate up to 100% of their contributions into equities. The scheme, titled the Multiple Scheme Framework (MSF), will officially roll out on October 1, 2025, coinciding with NPS Day.
This major policy change opens the door for higher-return opportunities within India’s premier retirement savings plan. Until now, equity allocation under NPS was capped at 75%, but the new framework gives investors more flexibility to align with their risk appetite.
Who Can Invest?
The new 100% equity investment option will be available to all NPS subscribers except government employees. Currently, central and state government employees enrolled in NPS have stricter investment norms, but private-sector subscribers, self-employed individuals, and corporate employees will be free to opt for this scheme.
PFRDA highlighted in its circular that the new framework is designed to provide personalized retirement solutions, ensuring that every investor has the opportunity to choose a portfolio that best matches their financial goals and risk profile.
Two Variants: Moderate and High-Risk
Under the Multiple Scheme Framework (MSF), pension fund managers will offer plans across different risk categories:
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Moderate Risk Plans – Balanced exposure with limited equity allocation.
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High-Risk Plans – Allowing up to 100% equity investment for maximum growth potential.
Fund managers may also introduce low-risk variants for conservative investors, ensuring that the system caters to a wide spectrum of financial preferences.
Importantly, all plans will come with a Risk-O-Meter to help subscribers clearly understand the level of risk associated with each investment option.
Key Features of the New NPS Framework
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PAN-Based Subscriber Identification
The MSF will operate under a new digital architecture, where subscribers across Central Recordkeeping Agencies (CRAs) will be identified through their Permanent Account Number (PAN). -
Minimum Vesting Period
To qualify for full benefits, the minimum vesting period will be 15 years. Subscribers can withdraw their accumulated corpus at the age of 60 or upon retirement, whichever comes earlier. -
Defined Objectives
Every scheme under NPS must clearly state its investment objectives, ensuring transparency for investors. -
Cost Efficiency
The annual charges for managing these schemes will be capped at 30 basis points (0.30%) of Assets Under Management (AUM), maintaining NPS’s reputation as one of the lowest-cost retirement products globally.
Why This Matters for Investors
Experts believe this reform could be a game-changer for retirement planning in India. By allowing 100% equity allocation, NPS now offers:
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Higher growth potential compared to traditional debt-heavy retirement funds.
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Greater flexibility, empowering investors to tailor portfolios to individual needs.
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Encouragement for financial innovation, as pension fund managers compete to design attractive products.
However, financial advisors also caution that high equity exposure comes with significant risks, especially market volatility. Long-term investors, particularly younger subscribers with higher risk tolerance, may benefit the most from the new framework.
Launch on NPS Day: October 1
The official launch of MSF on October 1 has symbolic importance, as it coincides with the annual NPS Day celebrations. PFRDA hopes the announcement will raise awareness about the benefits of early and disciplined retirement savings while giving subscribers greater control over how their money grows.
Final Takeaway
With the Multiple Scheme Framework, the NPS has taken a bold step toward offering global-standard retirement products. For the first time, Indian investors will be able to channel their entire retirement savings into equities, unlocking higher returns while managing risk through structured plans.
For subscribers, this means more choice, transparency, and flexibility in building a retirement corpus that matches their aspirations. And for pension fund managers, it opens the door to greater competition and innovation in India’s pension market.
As the scheme goes live on October 1, 2025, it may well mark the beginning of a new era in India’s retirement savings journey.
