Pension Fund Regulatory and Development Authority Introduces New NPS Corporate Model Structure: Key Changes for Subscribers

The Pension Fund Regulatory and Development Authority (PFRDA) has rolled out a revised framework for the corporate model of the National Pension System (NPS), introducing a clearer classification of organisations participating in the scheme.

Under the updated structure, companies offering NPS to their employees will now be placed in two distinct categories:

• Government entities
• Legal entities (non-government organisations)

The new framework came into force on January 1 and aims to streamline administration while making the cost structure more transparent for participating organisations.

Key Change: Reclassification of Organisations

Previously, all organisations participating in the NPS corporate model were treated as a single category. With the revised rules, companies must now identify whether they fall under the government entity category or the legal entity category.

This classification will determine how their NPS accounts are administered and what service charges may apply.

Criteria for Government Entities

Government-affiliated organisations can transition to the government NPS model, but they must meet certain conditions:

• Transfer their superannuation fund corpus to the NPS system within one year
• Ensure the capability to directly integrate with the Central Recordkeeping Agency (CRA)

Once these conditions are met, the organisation will operate under the government NPS structure, which follows a different administrative and cost framework compared to the corporate model.

New Fee Structure for Legal Entities

For legal entities, which include private companies and other non-government organisations, the regulator has introduced a revised Points of Presence (PoP) service charge.

Under the new structure:

• Subscribers will pay an annual PoP service fee of 0.20% of assets under management (AUM)
• The charge will be adjusted through the Net Asset Value (NAV)
• The fee will be deducted quarterly

This move is designed to create a more transparent and standardized fee mechanism for NPS services offered through corporate employers.

Government Entities to Bypass PoP Layer

Government organisations will not be required to use Points of Presence (PoPs) to access NPS services.

Instead, they will directly connect with the Central Recordkeeping Agency, which helps reduce administrative intermediaries and simplifies the management of pension accounts.

Summary

The Pension Fund Regulatory and Development Authority (PFRDA) has revamped the National Pension System (NPS) corporate model by dividing participating organisations into government entities and legal entities. Government organisations can migrate to the government NPS framework if they transfer their superannuation corpus and integrate with the Central Recordkeeping Agency. Meanwhile, legal entities will follow a revised fee structure, including an annual PoP service charge of 0.20% of assets under management, deducted quarterly through NAV adjustments. The new rules aim to simplify administration and bring greater transparency to the NPS corporate ecosystem.

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