PFRDA Reclassifies Corporate Entities Under NPS Into Government And Legal Entities, Know What It Is

The Pension Fund Regulatory and Development Authority (PFRDA) has reclassified the entities associated with it, offering the National Pension System (NPS). The NPS was first launched for the central government employees effective January 1, 2004, and was later adopted by several states, too. In 2009, the scheme was launched for all citizens. Later in 2015, PFRDA introduced the corporate sector model, where private sector companies could offer their employees an NPS scheme.

NPS has been mandatory for government employees until April 1, 2025, when the Unified Pension Scheme (UPS) was introduced as an option for central government employees to receive an assured pension. Unlike the individual subscribers or the private sector entities, which use point of presence (PoPs) services for onboarding subscribers, the government entities are integrated with the central record-keeping agency (CRA) systems for onboarding government subscribers, remitting contributions, addressing grievances, processing withdrawals and exits, etc.

However, there are certain entities that work for the government but are associated with PFRDA as corporate entities. To address this ambiguity, the PFRDA announced the reclassification.

According to the PFRDA circular dated March 10, 2026, the existing corporate entities under NPS will be reclassified as ‘Legal Entities (other than government)’ and ‘Government Entity’.

Corporate Entities Reclassified As Government Entities

A statutory body or a Government Company or any Body Corporate or any other entity under the ownership and control of either Central or any State Government (including Central Public Sector Enterprises (CPSEs) and State Public Sector Enterprises (SPSEs) will be considered a government entity.

So, the organisations operating “as an extended arm of the government” will now be tagged as “government entities” in the CRAs’ data, and their subscribers will be categorised under the government sector model.

They will be treated the same as the central and state government entities and their autonomous bodies. More importantly, due to no PoP involvement, these entities’ employees will directly be tagged under the integrated government and CRA system. So, no PoP-related charge will be applicable to them.

Corporate Entities Reclassified As Legal Entities (Other Than Government)

All the remaining corporate entities will be categorised as Legal Entities (Other Than Government).

De-Tagging Employees Switching From Government To Legal Entity

The regulator has clarified that if a person has worked for a government entity and later joins a Legal Entity (Other than government), the Government Entity will be responsible for de-tagging such employee from the CRA records under its system. The PFRDA (Redressal of Subscriber Grievance) Regulations, 2015, rules will continue to apply to the Government entities.  

For employees in Legal Entities (other than Government), the charge for NPS Common Schemes subscription is 0.20 per cent of the asset under management (AUM) per annum. It will be adjusted through the NAV to be paid to the PoP on a quarterly basis. These charges are effective January 1, 2026, and applicable to the existing accounts as well.

Certificate Submission For Reclassified Tag In CRA System

The corporate entities reclassified as “government” need to provide an undertaking that all their employees are mandatorily covered under the government model of the NPS. And that their asset under management (AUM) under the superannuation fund (SAF) will be fully transferred to the NPS architecture within one year from the date of the letter issuance.  

Further, “The concerned “Government entity” shall possess full technical and operational capability to integrate directly with the CRA system(s) for NPS subscriber onboarding, contribution remittance, uploading of Subscriber Contribution Files (SCFs), grievance management, processing of exits & withdrawal cases and other related functions, without the involvement of any Point of Presence (PoP) and would implement the same at the earliest,” reads the circular.

The last date to submit this certification to the CRAs is March 27, 2026. If it is not submitted by this date, such entities will be considered as Legal Entities (other than Government).