NPS to allow 100% equity exposure for high-risk investors from October 1: Should you opt in?

The Pension Fund Regulatory and Development Authority (PFRDA) has announced that under the new Multiple Scheme Framework (MSF), effective October 1, high-risk schemes in the National Pension System (NPS) can invest entirely in equities.

This is aimed at subscribers willing to take higher market risk for potentially larger long-term returns.

What’s new for investors?

• High-risk schemes with full equity: Investors opting for high-risk variants can allocate up to 100% of their portfolio in equities.
• Moderate and optional low-risk options: Subscribers can choose moderate-risk schemes or, if offered, low-risk schemes for a more conservative approach.
• Multiple schemes under one account: Even high-risk investors can diversify by holding several schemes under the same PAN, thanks to MSF.
• Long-term horizon recommended: Equity-heavy schemes suit subscribers with a minimum 15-year vesting period.

Why this matters?

Equities offer higher growth potential compared with fixed-income instruments, but come with greater volatility. The new option allows younger or aggressive investors to maximize retirement corpus growth while still benefiting from NPS’s low-cost structure (charges capped at 0.30% of AUM).

Should you opt in?

Subscribers should consider:

• Their risk appetite and investment horizon.
• Balancing high-risk and moderate-risk schemes under the same account.
• Monitoring performance and staying aware of market volatility.

The Multiple Scheme Framework, including the 100% equity option, will take effect on October 1, coinciding with NPS Diwas.