PFRDA has approved, in principle, a framework that may allow Scheduled Commercial Banks to independently set up Pension Funds for managing the National Pension System. The move is aimed at strengthening the pension ecosystem, expanding competition and protecting subscriber interests. The regulator has also revised the Investment Management Fee structure for Pension Funds, with effect from 1 April 2026, and appointed new trustees to the NPS Trust Board.
Bank Entry into Pension Funds
The proposed framework addresses existing regulatory limits that had restricted bank participation in pension fund management. It seeks to widen the pool of eligible sponsors for NPS-related pension funds.
- Only well-capitalised banks will be considered.
- Eligibility will be based on net worth, market capitalisation and prudential soundness.
- The criteria will be aligned with Reserve Bank of India norms.
- The detailed rules will be notified separately.
Impact on NPS Ecosystem
The move is expected to improve competition among pension fund managers. Greater participation by strong banks may also deepen the pension market and improve service standards for subscribers.
- The framework will apply to both new and existing Pension Funds.
- It is intended to safeguard subscriber interests.
- It may support wider pension coverage across multiple segments.
New Trustees Appointed
PFRDA has appointed three new trustees to the Board of NPS Trust through its selection process. Shri Dinesh Kumar Khara has been designated as Chairperson of the NPS Trust Board.
- Shri Dinesh Kumar Khara, former Chairman, State Bank of India.
- Ms. Swati Anil Kulkarni, former Executive Vice President, UTI AMC.
- Dr. Arvind Gupta, Co-Founder and Head, Digital India Foundation.
Revised Fee Structure from 2026
PFRDA has also revised the Investment Management Fee structure for Pension Funds. The new slab-based model will apply from 1 April 2026 and will differentiate between Government and Non-Government subscribers.
- The revised IMF will apply to schemes under the Multiple Scheme Framework.
- MSF corpus will be counted separately.
- The change is aimed at aligning with public expectations and international benchmarks.
- It also seeks to support coverage in corporate, retail and gig-economy segments.