National Pension System (NPS): Choosing the right investment option under the National Pension System is set to become more transparent and easier for investors. The Pension Fund Regulatory and Development Authority (PFRDA) has introduced a new framework for classifying NPS schemes and presenting important scheme-related information in a standardised format.
Under the new system, investors will be able to see key details such as equity exposure, risk level, historical returns, fees, benchmarks and other relevant information before selecting an NPS scheme.
Along with these changes, a new charge will also apply to certain NPS accounts. From October 1, 2026, a one-time registration fee of ₹200 per PRAN will be applicable to NPS accounts opened through Points of Presence (PoPs).
NPS Registration Fee of ₹200 From October 1
According to reports, the ₹200 registration charge will not be taken from the NPS account in a single deduction. Instead, Central Recordkeeping Agencies (CRAs) will recover the amount in four quarterly instalments of ₹50 each.
The collected amount will then be transferred to the concerned Point of Presence in the month following the quarter in which the NPS account opening process was completed.
This fee structure will apply to accounts opened through PoPs from October 1, 2026.
NPS Schemes to Be Classified Into 5 Categories
PFRDA announced the new classification framework through a circular issued on August 28, 2026.
Under the revised structure, NPS schemes will primarily be divided into five categories based on their level of equity exposure:
- Category A
- Category B
- Category C
- Category D
- Category E
The purpose of this classification is to give investors a clearer picture of how much equity-market exposure a particular scheme has and what level of investment risk may be involved.
This standardised approach could make it easier for NPS subscribers to understand and compare available schemes before making an investment choice.
One NPS Scheme Cannot Fall Under Two Categories
Another important feature of the new framework is that an individual scheme can be assigned to only one category.
For example, the same scheme cannot simultaneously be classified under both Category B and Category C. Each scheme will have to be placed within a specific category according to the applicable classification criteria.
The move is expected to make comparisons between NPS schemes more straightforward.
Investors Can Compare Schemes on Multiple Parameters
The revised information framework will provide investors with a broader set of details instead of making historical returns the sole focus.
Subscribers will be able to compare schemes using factors such as:
- Scheme name
- Pension fund
- Scheme launch date
- Historical performance
- Benchmark
- Applicable charges
- Riskometer
- Assets Under Management (AUM)
Having these details together can help investors understand the overall characteristics of a scheme before selecting an option.
Don’t Choose an NPS Scheme Based Only on Returns
A scheme that has delivered higher returns in the past may also involve greater investment risk. Therefore, investors should avoid choosing an NPS option solely because it has shown strong historical performance.
Equity exposure, risk level, benchmark performance, charges and risk-adjusted returns are also important considerations.
Past performance does not guarantee future returns, so investors should evaluate a scheme from multiple perspectives rather than relying on a single number.
What Do the New NPS Rules Mean for Existing Subscribers?
The broader objective of these changes is to bring greater consistency to NPS scheme names, classifications and the presentation of scheme information.
However, the new classification framework will not apply to government-sector NPS accounts.
For other existing NPS subscribers, a change in a scheme’s name or category does not automatically mean that they need to make a fresh investment decision.
However, subscribers should pay attention if their existing scheme is subject to restructuring, changes or a merger. In such situations, investors should carefully review the updated information and understand how the changes may affect their investment.
NPS Changes Aim to Make Scheme Selection More Transparent
The new PFRDA framework is designed to make NPS scheme information easier to understand and compare. Standardised categories and disclosures should help investors look beyond headline returns and assess factors such as risk, equity exposure, charges and benchmark performance.
For NPS subscribers, the key takeaway is simple: don’t judge a pension scheme by returns alone. Understanding the risk and investment structure of a scheme is equally important when making long-term retirement-planning decisions.