NPS charge hike deferred to Dec 1: What subscribers must know about terms

PFRDA's revised fee structure includes a Rs 200 onboarding charge and an annual fee of 0.20 per cent of assets, subject to exemptions

The Pension Fund Regulatory and Development Authority (PFRDA) has deferred the implementation of revised charges under the National Pension System (NPS) and NPS Lite by two months, giving subscribers more time before the new fee structure takes effect.

 

In a circular earlier this week, the regulator moved the implementation date from October 1 to December 1, 2026. The extension applies to revised Point of Presence (PoP) charges under the schemes. All other provisions of the PFRDA’s August 28 circular remain unchanged.

 

The revised structure introduces a one-time onboarding fee and an annual charge linked to the assets managed for subscribers. However, the charges will depend on applicable exemptions and the channel through which an account is opened and funded.

 

 

What are the revised NPS charges?

Under the revised structure, the main charges are:

 

Onboarding fee: Rs 200 per Permanent Retirement Account Number (PRAN) for subscribers registering through a PoP. The amount will be recovered in quarterly instalments of Rs 50 through cancellation of units.

 

Annual charge: 0.20 per cent of assets under management (AUM), adjusted through the scheme’s net asset value (NAV) and payable to the PoP quarterly, subject to applicable exemptions

 

Digital onboarding: A one-time charge of Rs 100 may apply to subscribers completing the process entirely through a digital, non-face-to-face route, depending on the terms determined by the PFRDA.

 

Taxes: GST and other applicable taxes are extra.

 

A PoP is an intermediary that facilitates NPS services, including account opening and subscriber transactions.

 

How will the annual charge affect your savings?

The annual charge varies with the value of the assets managed. For instance, at a rate of 0.20 per cent, an NPS corpus of Rs 5 lakh would attract a charge of Rs 1,000 a year, while a corpus of Rs 10 lakh would attract Rs 2,000, before applicable taxes.

 

These are illustrative calculations. The actual deduction will depend on the applicable rules and exemptions.

 

Since charges reduce the amount available for investment and compounding, subscribers should check the fees applicable to their accounts.

 

Who is exempt from the charges?

Certain accounts opened and funded exclusively through specified e-NPS and D-Remit channels are exempt from PoP charges. Dormant accounts meeting the PFRDA’s prescribed conditions are also exempt from the annual charge.

 

An account is considered dormant under the regulator’s definition when, after a contribution in a quarter, no further contribution is made for four consecutive quarters, as assessed at the end of each quarter, using the subscriber’s PAN across Central Recordkeeping Agencies (CRAs).

 

Subscribers should confirm their eligibility rather than assume that every online account qualifies for an exemption.

 

What should they do?

The revised charges are scheduled to take effect on December 1, 2026. Before then, subscribers should:

 

Check whether their account is serviced through a PoP or qualifies for an exemption.

 

Ask their PoP or CRA for a breakdown of applicable charges and taxes.

 

Confirm whether their account meets the conditions for dormant-account exemption.

 

Review the official PFRDA circulars if the applicability of any charge is unclear.

 

The revised framework also sets a minimum contribution of Rs 250 at onboarding and Rs 10 for subsequent contributions.

 

The October 26 circular changes only the implementation date. Subscribers should prepare for the revised charges from December 1 while checking the specific rules applicable to their accounts.