PFRDA Proposes Changes In POP Rules: What NPS Subscribers Need To Know

The Pension Fund Regulatory and Development Authority (PFRDA) has proposed amendments to its point of presence (PoP) Regulations, 2018, in a bid to modernise the pension distribution network. The aim is to strengthen last-mile distribution and enhance service efficiency for subscribers of the National Pension System (NPS). 

PFRDA aims to make pension onboarding and servicing convenient for NPS subscribers by widening the distribution network to the rural and underserved areas. The focus is to establish a highly structured digital mode for onboarding subscribers, so that their personal details can be captured electronically, contributions are transferred securely through digital mode, and service requests are executed faster. This could shift the burden of physical paperwork away and improve the transaction process. The proposal is expected to pave the way for a more accessible, secure and seamless retirement journey for NPS subscriberssubs. 

Notably, the draft exposure proposal has laid down a provision for PoPs to indemnify subscribers for any proven losses due to negligence or fraud committed by PoPs or their agents. The Code of Conduct is aimed at ensuring fair disclosures and maintaining confidentiality of personal financial data. 

Key Changes Proposed In The Draft

The draft introduces structural reforms across application processes, fee structures, and eligibility of the PoP entities. Here are the changes proposed in the draft. 

Physical And Digital Mode Of Distribution: PoPs will be categorised into two modes, digital and physical. The digital mode means a completely online onboarding and servicing platform, whereas any hybrid or physical onboarding will be considered as the physical mode. 

Entities’ Eligibility To Become PoPs: At present, only companies, banks, and non-banking financial companies (NBFCs) are eligible to serve as PoPs. To address this, the proposal recommends including limited liability partnerships (LLPs), societies, trusts, and co-operative societies in the eligible entities to distribute pension products. 

Application Fees And Timelines: The application fee for the physical mode is proposed to be increased from Rs 10,000 to Rs 25,000, whereas digital mode applicants will be offered a complete fee waiver. PFRDA has also laid down strict timelines to complete the application process. It has proposed communicating the deficiencies within 14 days and disposing of the complete application within 30 days.   

Minimum Number Of Branches For Physical Mode: According to the proposal, the PoPs that operate under the physical mode must maintain a minimum of five branches or offices across India to offer the services.

Annual Fee: The proposal recommends replacing the existing five-year renewal cycle with an annual fee of 1 per cent of the pension charges earned in the previous financial year. The minimum annual fee is proposed to be Rs 3,000 payable within 60 days from the financial year-end. 

Digital Collection Account: Under the proposed changes, PoPs using the digital mode will open a separate ‘Digital Collection Account’ for each pension scheme to protect client funds. 

Pension Agent To Be Called NPS Mitra: The term “Pension Agents” is to be replaced with “NPS Mitra” across all regulations. PoPs will formulate an internally approved policy instead of relying on the board-approved policy. 

Material Disclosure Mandatory: The PoPs must report any material changes in the information or particulars previously furnished to PFRDA within seven days that may affect their Certificate of Registration. 

Audit Fees: Under this provision, the audit or inspection fee is proposed to be simplified. The authority will prescribe the procedure for payment through guidelines, circulars, or directions.

How To Share Your Feedback

PFRDA has sought feedback on the draft proposal from stakeholders on or before October 2, 2026. Stakeholders can submit their responses online through PFRDA’s official website or by emailing the authority in the specified format.