PFRDA Releases New Subscriber Guidelines: MSF Pension Funds Get NEI Boost

The Pension Fund Regulatory and Development Authority (PFRDA) has officially released operational guidelines for the new enrolment incentive under the Multiple Scheme Framework (MSF). The pension fund managers (PFMs) are eligible to receive an additional incentive of 0.10 per cent of assets under management as the New Enrolment Incentive (NEI) upon enrolling new subscribers under the MSF schemes. However, NEI will become applicable only when 80 per cent of enrolment is new subscribers. The new enrolments mean those who join MSF for the first time or already have a national pension scheme (NPS) account but are opting for one or more MSF schemes.

Here are the new guidelines.

How Will NEI Be Determined?

PFRDA will review the enrolment status of PFMs after every 12 months from the date of their schemes’ approval and determine the incentive. The approved incentive applies for three years from the approval date or until 50 lakh subscribers join an MSF scheme, whichever is earlier.

When Will A Subscriber Be Treated As New?

• When a subscriber enrols for the first time to get a permanent retirement account number (PRAN) under any CRA and opts for an MSF scheme of one pension fund (PF).

• (No incentive will be applicable when the same subscriber enrols under a different CRA for investing in the MSF scheme)

• When a new subscriber selects more than one MSF scheme of the same PF, incentive will be paid only for the first MSF scheme selected under that PF.

• When a new subscriber selects MSF schemes of a different PF, an incentive will be paid for each MSF scheme selected under different PFs

• When a new subscriber selects multiple MSF schemes across multiple PFs, an incentive will be paid for only the first MSF scheme selected under each PF.

The introduction of NEI guidelines is aimed at encouraging intermediaries to bring into formal pension coverage. The NEI or incentives will be paid to the PFs by the Association of NPS Intermediaries (ANI). The ANI will receive 0.0025 per cent of the AUM for enhancing outreach activities and increasing awareness and pension literacy, effective April 1, 2026.

Focus Areas Of NEI Framework

The guidelines emphasised bifurcated focus areas under the proposed NEI payment framework.

• ANI to focus on spreading awareness and managing NEI

• PFs to focus on scheme-specific efforts and enrolling new subscribers

Notably, PFRDA oversees diverse pension products under the NPS operational infrastructure, and MSF is the newest addition to it, which is only for non-government sector subscribers. The other schemes include for both government and non-government sectors, include the National Pension System (NPS), NPS Vatsalya, and the Atal Pension Yojana (APY). Unified Pension Scheme (UPS) is only for government sector at present. By integrating the NEI for MSF, PFRDA aims to create a cohesive environment for pension products.

The authority leverages a vast network of registered intermediaries to execute these pension schemes. This network includes the NPS Trust, central recordkeeping agencies (CRA), pension funds, trustee banks, and custodians. In addition to it, points of presence and retirement advisors (RAs) also play a critical role in reaching out to potential subscribers in the All Citizen Model and corporate sectors.