Scheduled Commercial Banks can now become sponsors of pension funds: PFRDA

The PFRDA board has approved the framework in principle.

The PFRDA board has approved the framework in principle. This has been done “with the aim of strengthening the pension ecosystem, increasing competition and safeguarding the interests of subscribers,” said a statement from PFRDA.

The proposed framework aims to address the existing regulatory constraints that have hitherto limited bank participation, while introducing clearly defined eligibility criteria based on assets, market capitalization and prudential soundness in accordance with RBI norms, to ensure that only well-capitalized and systemically robust banks are allowed to sponsor pension funds, it added.

Revised IMF structure for pension funds

The pensions regulator has also revised the Investment Management Fee (IMF) structure for pension funds. This will come into effect from April 1. The revised slab-based IMF introduces differentiated rates for government and non-government sector subscribers and will also apply to schemes under the Multiple Scheme Framework (MSF), with the MSF corpus counted separately. The IMF for public sector employees under Composite Scheme or those opting for Auto Choices and Active Choice G 100s will remain the same,” the report said.

The rate will range from 0.04 percent to 0.12 percent depending on the number of assets under management. The revision has been made to be in line with the evolving realities, aspirations of Indian citizens, international benchmarks and the objective of expanding coverage to enterprise, retail and gig economy segments while safeguarding the interests of the subscribers, the statement said.

Further, the Annual Supervisory Fee (ARF) of 0.015 percent, payable by pension funds to PFRDA, remains unchanged; Of this, 0.0025 percent of assets under management will be passed on to the Association of NPS Intermediaries (ANI) to support coordinated awareness, outreach and financial literacy initiatives under the overall leadership of PFRDA.

“As formalization in the country’s financial and pension sectors continues to grow and impact the financial aspirations of every Indian citizen, PFRDA expects that these policy reforms will help subscribers and stakeholders access a more competitive, well-governed and resilient NPS ecosystem, leading to better long-term retirement outcomes and greater income security for the elderly,” the statement said.

New appointments

In another decision, the board appointed former SBI chairman Dinesh Kumar Khara as the new chairman of the NPS Trust Board. Besides Khara, Swati Anil Kulkarni (former Executive Vice President, UTI AMC) and Arvind Gupta, co-founder and head of the Digital India Foundation and member of the National Venture Capital Investment Committee under the Fund of Funds Scheme managed by SIDBI) have also been appointed as trustees.

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Published on January 1, 2026