NPS MSF Schemes: More Choice Or More Confusion?

The launch of shorter-term schemes under the Multiple Scheme Framework (MSF) of the National Pension System (NPS) has given more choice to investors, but will that breed confusion and are these schemes fit for consistent long-term savings?

- Versha Jain

The National Pension System (NPS), has undergone massive overhaul under the new Pension Fund Regulatory and Development Authority (PFRDA) chairman S. Ramann. The most significant change has been the introduction of Multiple Scheme Framework (MSF) on October 1, 2025, under which the pension fund managers (PFMs) have floated their own customised schemes (see New NPS MSF Schemes).

The primary rationale behind launching MSF is to offer greater choice to NPS subscribers and provide them a larger pie in equity investment (up to 100 per cent). The base NPS scheme, Tier-I, offers up to 75 per cent equity exposure, while the Tier-II scheme gave the option of investing 100 per cent in equity, but was available on a voluntary basis. Also, only Tier-I subscribers could opt for Tier-II. Both are now called common schemes.

Mamta Rohit, executive director of PFRDA, talking to media recently, said that the goal of MSF is to offer subscribers greater choice, flexibility, personalised retirement solutions, and attract young investors.

Let's understand what MSF schemes are and whether a multitude of offerings from NPS could overwhelm investors.

What Is MSF?
While existing NPS schemes serve all subscriber segments, MSF schemes are available only for non-government subscribers, including self-employed individuals, gig workers and others. PFMs can offer schemes with variants ranging from low, moderate to high risk.

Greater Equity Exposure: MSFs offer up to 100 per cent equity exposure without having to subscribe to NPS Tier-1. The latter gives two choices—auto and active. Under auto choice, the maximum equity limit is 75 per cent up to 35 years of age, 50 per cent up to 45 years of age, and 35 per cent at 55 years and above. Under active choice, one can increase equity limit at any age, but up to 75 per cent.