Pension Fund Regulatory and Development Authority
The Pension Fund Regulatory and Development Authority (PFRDA) has issued a new circular, in which it has been clarified how charges will be applicable on subscribers under the National Pension System (NPS) and its related schemes. These new clarifications will come into effect from July 1, 2026. The regulator said the move is aimed at bringing greater clarity and uniformity in the way charges are levied by Central Recordkeeping Agencies (CRAs). Let us also tell you what kind of information is there in the circular from PFRDA…
AMC for Tier I and Tier II: What are the changes?
One of the main explanations is related to the Annual Maintenance Charge (AMC). PFRDA said that AMC for Tier II accounts will now be aligned with Tier I accounts under the same sector (government or private). However, it is a matter of relief for small investors. No AMC will be set up…where such [Tier II] The amount deposited in the account at the end of any quarter should be up to Rs 1,000. This means that if your Tier II balance remains Rs 1,000 or less, no AMC will be charged on you.
Separate AMC for every scheme under the same PRAN
It has also been made clear in the circular that even if you have the same PRAN (Permanent Retirement Account Number), each scheme will be treated as a separate account. Each pension scheme being run under a PRAN will be treated as a separate account… and AMC will be charged separately on each such account. Therefore, if you have multiple plans under the same PRAN, there may be separate charges for each plan.
Big relief for inactive accounts
There is a special discount for inactive subscribers. If your account becomes inactive (no contribution for 4 consecutive quarters), you will be charged only 10% of the normal AMC. The circular states that in case of inoperative accounts, AMC of 10% of the applicable AMC will be levied.
What is a dormant account?
According to PFRDA, an account in which no contribution is received for four consecutive quarters will be considered as dormant account. Such accounts will be marked dormant in the first week of the next quarter, and the reduced charges will remain in effect until the account is reactivated.
PRAN opening charges: No additional fees for additional accounts
- The fee for opening PRAN will be charged only once, that too at the time of initial account creation.
- If you open or activate additional accounts (Tier I or Tier II) under the same PRAN, no additional charges will be charged.
- The charges for activation/opening of every account under the existing PRAN will be zero.
Zero AMC for some plans
No AMC will be charged for zero balance accounts under Atal Pension Yojana (APY) and NPS-Lite.
How and when will fees be collected
It has been said in the circular that the fees will be collected at the end of every quarter. Either the employer will be billed (if they bear the expense), or it will be deducted directly from the subscriber's account. PFRDA's circular states that the applicable charges will be recovered at the end of every quarter or by deducting units from the subscriber's account.
What will not change?
PFRDA clarified that all other provisions of its previous circular dated September 15, 2025 will continue without any change.
Why it matters for NPS subscribers
Simply put, these clarifications bring greater transparency on how charges are applied, provide relief to small and passive investors, and provide clarity on multiple accounts under one PRAN. For subscribers, especially those who have multiple plans or inactive accounts, this can reduce confusion and, in some cases, even reduce charges.
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