PFRDA introduces new classification framework for NPS schemes

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced a new standardized framework for the classification, naming, and presentation of investment schemes under the National Pension System (NPS).

Under the new rules, NPS schemes will be organized into five primary types: Lifecycle-based schemes, Active Choice, NPS Sanchay, Multiple Scheme Framework (MSF) schemes, and 4A schemes. MSF schemes will specifically be categorized into five risk-based groups (A through E) determined by their equity exposure, ranging from Aggressive Growth (80%-100% equity) to Debt (0%-10% equity).

To implement these changes, pension funds must restructure or reclassify any existing MSF schemes that currently span multiple categories to ensure they conform to a single prescribed category. Additionally, funds must rename existing MSF schemes according to a new common naming convention within 30 days. Pension funds are also limited to offering a maximum of two schemes under each category per tier; any excess schemes must be merged or restructured within 45 days.