The Pension Fund Regulatory and Development Authority (PFRDA) has revised the Investment Management Fee (IMF) charged by pension funds under the National Pension System (NPS).
The new fee structure will come into effect from April 1, 2026, for a period of five years.
Currently, the IMF charged by Pension Funds (PFs) to subscribers is valid until March 31, 2026, and the existing framework does not differentiate between Government Sector (GS) and Non-Government Sector (NGS) subscribers in terms of the IMF payable by them.
To review the fee structure, PFRDA constituted an Expert Committee under the chairmanship of Shri U. K. Sinha, former Chairperson of SEBI. Based on the Committee's recommendations and subsequent approval by the PFRDA Board, a revised IMF structure has been approved.
No change for government sector subscribers
There will be no change in the IMF applicable to Government sector subscribers under composite schemes. Government sector subscribers who have opted for individual investment choices such as Auto Choice or Active Choice (with 100% allocation to Government securities) will continue to be charged the same IMF as those under composite schemes.
Slab-based fee structure continues
The revised IMF structure continues to follow a slab-based differentiated rate for Government and Non-Government sector subscribers.
Here's a comparative table showing the (IMF) slabs for both non-government sector subscribers (NGS) and government sector subscribers (GSS)
| AUM Slabs (₹ Crore) | NGS IMF | GS IMF |
|---|---|---|
| Up to 10,000 | 0.12% | 0.09% |
| Above 10,000 to 25,000 | 0.12% | 0.06% |
| Above 25,000 to 50,000 | 0.08% | 0.06% |
| Above 50,000 to 1,50,000 | 0.06% | 0.05% |
| Above 1,50,000 | 0.04% | 0.03% |
( Source: PFRDA)
Annual fee for pension funds unchanged
The annual fee payable by Pension Funds to PFRDA remains unchanged. Pension funds will continue to pay 0.015% per annum of AUM or ₹10 lakh per year, whichever is higher, plus applicable taxes.
This fee will be paid quarterly at 0.00375% of AUM (based on AUM at the end of the previous quarter) or ₹2.5 lakh per quarter, whichever is higher.
Reclassification of corporates under NPS
In another development, PFRDA has decided that existing "Corporates" under the NPS will be reclassified into (i) Government Entities and (ii) Legal Entities (other than Government).
A "Government Entity" shall include a statutory body, Government company, body corporate or any entity under the ownership and control of the Central or State Government, including Central Public Sector Enterprises (CPSEs) and State Public Sector Enterprises (SPSEs).
Organisations currently associated with PFRDA under the Corporate Sector model, but which operate as an extended arm of the Government, shall henceforth be categorised under the Government Sector model of NPS and tagged as "Government Entities" with the respective Central Recordkeeping Agencies (CRAs).
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