Unlocking The New NPS Rules: Bigger Options, Bigger Traps?

Pragya Pathak

Author

Updated: 21-10-2025 at 3:30 PM

The National Pension System (NPS) has recently added and introduced a new framework called the Multiple Schemes Framework (MSF). Under this new framework, pension fund managers can now launch multiple schemes, which will not only help the pension fund managers in managing several schemes, but also the people by giving them varied options.

Read the article to learn more about the newly launched framework, including information on tier‐2 NPS scheme and NPS investment risks that one should be aware of.

What Is The Multiple Schemes Framework (MSF)?

Earlier, the old system that the pension fund managers were using could only run one common scheme in every asset class because of which managers and people were facing many difficulties. To resolve these issues and allow more flexibility in NPS, the National Pension System launched the Multiple Schemes Framework (MSF).

NPS new schemes allows managers to launch several schemes with their unique design plan, like strategy, risk level, and NPS asset mix choices. This also provides people with the freedom to choose from various options like equity, debt, or mixed, based on their preference.

For detailed information about the NPS, including information on NPS investment risks or NPS tax treatment, please read JB’s article on the same.

Difference Between MSF & The Old System

The differences between the NPS new schemes and the old system are listed below for one's reference. However, please note that the old system will continue to exist, and investors can choose as per their preference.

Money invested in old schemes cannot be moved, but contributions can move under MSF.
Contributions in MSF can be deposited back into common schemes without tax problems.
NPS accounts of government officials cannot be shifted to MSF; however, they can choose to open a new one if they want.
Under MSF, investors will now be able to exit early. Earlier, they had to wait till 60 years, but now they can opt for early exit NPS after 15 years of investing. Please note that the withdrawal policies remain the same.

What Investors Should Keep In Mind?

The new framework has been launched to increase ease and accessibility; however, it has its fair share of complexity of choice in NPS. Fund managers are now allowed to charge up to 0.30% in fees, which was 0.03 to 0.09% before, so higher fees in NPS schemes have been introduced.

Many advisors have issued their opinions about MSF, and all of them advise investors to carefully consider all the newly given options, as it is coming off as confusing to many. All the advisors share one opinion till now and. i.e., NPS is a retirement savings options India, and that’s why it should remain simple and easy to understand, not complicated.

Conclusion

The National Pension System introduced the Multiple Schemes Framework (MSF) to provide both pension fund managers and investors with much more flexibility and access to various options. We request that you understand the new framework extremely thoroughly, by beginning from the debt‐oriented NPS plan and annuity lump sum split NPS, to the specifics of the new framework, and only after that, decide on what to invest in.

Stay updated with Jaagruk Bharat to get the latest information on government schemes and more, and reach out to us via our community page if you have any questions or you wanna share your thoughts.