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Informist, Thursday, Jan. 1, 2026

 

NEW DELHI – Pension Fund Regulatory and Development Authority has in principle approved a framework to permit scheduled commercial banks to independently set up pension funds to manage the corpus under National Pension System, the pension regulator said Thursday. This will strengthen the pension ecosystem, enhance competition and safeguard subscribers' interests, the regulator said.

 

The proposed framework aims to address regulatory constraints that have limited bank participation to date, the PFRDA said. "By introducing a clearly defined eligibility criteria based on net worth, market capitalisation and prudential soundness in line with RBI (Reserve Bank of India) norms, it will ensure that only well-capitalised and systemically robust banks are permitted to sponsor pension funds," the regulator said in a release. The detailed criteria will be notified separately and will apply to both new and existing pension funds.

 

As part of measures to strengthen governance, the PFRDA has appointed three new trustees to the NPS Trust board – former State Bank of India chairman Dinesh Kumar Khara, former UTI AMC executive vice-president Swati Anil Kulkarni, and Co-Founder and Head of the Digital India Foundation Arvind Gupta – following a formal selection process. Khara will chair the board.

 

PFRDA has also revised the Investment Management Fee structure for pension funds to align with evolving market realities, international benchmarks and the objective of expanding National Pension System coverage across corporate, retail and gig-economy segments. The revised slab-based fee structure will take effect on Apr. 1 and introduces differentiated rates for government and non-government sector subscribers. The fee structure for government sector employees under the composite scheme, auto-choice, and active-choice G-100 options will remain unchanged.

 

For non-government sector subscribers, the fee will range from 0.12% for assets under management up to INR 250 billion to 0.04% for AUM above INR 1.5 trillion. The revised structure will also apply to schemes under the Multiple Scheme Framework, with their corpus counted separately.

 

The Annual Regulatory Fee payable by pension funds to PFRDA will continue at 0.015% of AUM. Of this, 0.0025% will be allocated to the Association of NPS Intermediaries to support coordinated awareness, outreach and financial literacy initiatives under the regulator's guidance.

 

There are currently 10 pension fund managers operating under PFRDA – LIC Pension Fund Ltd., SBI Pension Funds Pvt. Ltd., UTI Pension Fund Ltd., HDFC Pension Fund Management Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension Fund Ltd., Aditya Birla Sun Life Pension Fund Management Ltd., TATA Pension Fund Management Pvt Ltd., Axis Pension Fund Management Ltd., and DSP Pension Fund Managers Pvt. Ltd.  End

 

Reported by Priyasmita Dutta

Edited by Saji George Titus

 

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