The Pension Fund Regulatory and Development Authority (PFRDA) has made a landmark announcement that will excite investors — from October 1, 2025, NPS subscribers in the non-government sector can invest their entire corpus in equity. Here’s everything you need to know:

🆕 1. Multiple Scheme Framework (MSF) Introduced

The new rule comes under the Multiple Scheme Framework (MSF), giving investors more flexibility in choosing how their money is invested across equity (E), corporate bonds (C), and government securities (G).

📊 2. 100% Equity Option Now Possible

Earlier, equity allocation in NPS was capped at 75% (for Active Choice). Now, subscribers can choose to invest up to 100% in equity, allowing them to maximize growth potential, especially if they have a long investment horizon.

👩‍💻 3. Who Can Benefit?

This facility is available for non-government sector subscribers, including private-sector employees, self-employed individuals, and voluntary NPS contributors. government sector employees will continue with their existing allocation rules.

💰 4. Higher Returns, Higher Risk

While 100% equity allocation has the potential to generate higher returns in the long term, it also carries higher market risk. Subscribers must assess their risk tolerance and investment horizon before opting for full equity exposure.

📅 5. Ideal for Young Investors

Financial planners suggest that younger investors in their 20s and 30s can benefit the most from this change, as they have time to ride out market volatility and enjoy the compounding effect of equity returns.

🛠️ 6. How to Change Your Allocation

Subscribers can log in to the CRA (Central Recordkeeping Agency) portal or use their POP (Point of Presence) to modify their asset allocation under Active Choice and switch to 100% equity if desired.

🧾 7. Tax Benefits Remain the Same

NPS continues to offer tax deductions under Section 80CCD(1), 80CCD(1B), and 80CCD(2), making it one of the most tax-efficient retirement savings instruments even with full equity exposure.

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