Important Update for NPS Subscribers
Scheme A (Tier I) Merger Announcement
Message to NPS Subscribers
Dear Subscriber,
Thank you for being a valued member of the National Pension System (NPS). We would like to inform you of an important development concerning Scheme A, which you had opted for earlier under Active Choice in Tier I.
After a comprehensive review of the scheme's performance and structure, and keeping your long-term retirement interests in focus, it is proposed by PFRDA to merge Scheme A with Schemes C and E. This step is intended to provide a more stable, efficient, and rewarding investment experience for subscribers.
Benefits of the Merger
The merger of Scheme A with other asset classes brings several key advantages:
🎯 Diversification & Stability
Scheme A had a relatively small corpus. Post-merger, your contributions will be part of larger and more diversified portfolios under Schemes C and E, helping reduce concentration risk and enhance stability.
📈 Improved Risk-Adjusted Returns
Larger schemes offer better flexibility and portfolio management efficiency, supporting more consistent long-term returns and a better balance between risk and reward for retirement investment.
💧 Higher Liquidity
Certain assets under Scheme A involve longer lock-in periods. After the merger, investments will shift to schemes with higher liquidity, facilitating smoother withdrawals and switches.
🌍 Market Best Practices
This merger aligns NPS with evolving best practices and market reforms, ensuring a more efficient and future-ready scheme structure.
Why This Change is Made in Your Best Interest
🔄 PFRDA's Strategic Reforms
PFRDA has recently approved significant reforms aimed at modernising the NPS investment framework. These reforms:
- Expand the permissible investment universe
- Enhance diversification
- Promote a more efficient scheme architecture to help subscribers build stronger and more resilient retirement wealth
💰 Formalization, Financialization & Pensionalization (FFP)
As Formalization, Financialization, and Pensionalization of the Nation continue to influence the financial aspirations of every Indian citizen, long-term pension (patient) capital is expected to grow and integrate more deeply with India's growth story. FFP remains a key pillar in strengthening long-term old age income security.
Merging Scheme A with Schemes C and E ensures that your NPS contributions are invested in larger, diversified, and more liquid portfolios, enabling smoother management and more efficient long-term growth.
Those NPS Subscribers who had opted for Scheme A in Tier I (Active Choice) can exercise additional choice of switching their wealth from Scheme A into any other asset classes of their choice without any additional cost till 25th December 2025 as per applicable guidelines.
Contact PFRDA
Address: E-500, Tower E, Fifth Floor, World Trade Center, Nauroji Nagar, New Delhi – 110 029
Phone: 91-11-40717900
Website: www.pfrda.org.in
For more information about NPS, Scheme A merger, and switching options, please visit the official PFRDA website or contact their support team.
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