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The Pension Fund Regulatory and Development Authority (PFRDA) has amended its framework for the classification and presentation of schemes under the National Pension System (NPS), clarifying scheme naming requirements and how pension fund options must be displayed on different platforms. Under the revised rules, Point of Presence (PoP) platforms must display schemes offered by all pension funds within the category selected by a subscriber. This will allow subscribers to compare available schemes before making a choice.
The amendments were issued through a circular dated November 2, modifying the regulator's August 28 circular on the standardised framework for NPS schemes. How will NPS schemes be named? PFRDA has prescribed a naming format for schemes under the Multiple Scheme Framework (MSF).
A scheme name must include the pension fund's abbreviation, the common identifier 'NPS' and a unique name assigned by the pension fund. For Tier II schemes, 'Tier II' must be added at the end of the name. Tier I is the default offering and need not be mentioned separately.
For example, a scheme could be named 'XYZ NPS Retirement Scheme', while its Tier II counterpart would be 'XYZ NPS Retirement Scheme Tier II'. The category codes A to E will not form part of scheme names. Pension funds offering multiple schemes within the same category must give each a distinct name.
How will scheme categories and risk levels be displayed? In public-facing material, including advertisements, brochures and media communications, the full applicable scheme or growth category must appear immediately below or alongside the scheme name in a smaller font. For instance, 'XYZ NPS Retirement Scheme' may carry the description 'Aggressive Growth – Very High Risk'.
The category must also be clearly mentioned in the NPS Scheme Essentials Document and scheme brochure. Will PoP platforms display schemes from all pension funds? Under the amended rules, PoPs operating their own platforms must display schemes offered by all pension funds within the category selected by the subscriber.
For example, if a subscriber selects 'Balanced Growth – Medium Risk', the platform must show schemes from all pension funds in that category, along with prescribed information. A PoP can place a particular pension fund's schemes at the top of the list and pre-select a scheme, but it must continue to display options from other pension funds in the selected category. An exception applies when a subscriber specifically chooses a pension fund's own website or application and the fund operates the onboarding process.
In such cases, the platform can display only that fund's schemes. NPS Central and CRA platforms, including interim redirection journeys, must also display schemes from all pension funds within the subscriber-selected category. The Star NPS platform used by pension funds can display their schemes to pension agents appointed by them.
When will the revised rules take effect? PFRDA has directed all intermediaries to implement the provisions of the August 28 circular, as amended, by December 1. Central Recordkeeping Agencies (CRAs), pension funds and PoPs must update scheme names, brochures, scheme documents, advertising material, websites, applications and subscriber onboarding processes within this deadline.
NOTE TO READERS Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions. Tags
Source: CNBC TV18
