PFRDA Updates Fee Structure for Pension Fund Management

New Guidelines from PFRDA on CRA Fees

The Pension Fund Regulatory and Development Authority (PFRDA) has issued fresh guidelines concerning the fee structure for Central Recordkeeping Agencies (CRAs) that manage pension schemes under its jurisdiction. In a circular released on April 29, 2026, the authority addressed various issues that emerged following its previous notification on CRA pricing norms dated September 15, 2025. A significant update pertains to the Annual Maintenance Charges (AMC) for Tier-II accounts within the National Pension System (NPS). The PFRDA has announced that Tier-II accounts will now incur the same AMC as Tier-I accounts, regardless of whether they belong to the government or private sector.

To support smaller investors, the PFRDA has exempted Tier-II accounts with a total balance of up to Rs 1,000 from AMC fees. The exemption will be determined based on the account balance at the end of each quarter.

Previously, AMC caps were established across various pension schemes. Subscribers in the government sector under NPS and UPS were charged Rs 100 annually per account, while those in the APY and NPS-Lite categories paid Rs 15. For private-sector NPS and NPS Vatsalya accounts, fees varied based on the corpus size, ranging from Rs 100 to Rs 500 annually. The PFRDA has emphasized that these charges represent the upper limit, and CRAs cannot impose fees exceeding these thresholds.

The recent clarification also introduces a lower AMC for accounts deemed dormant. If an account does not receive any contributions for four consecutive quarters, it will be classified as dormant. In such cases, only 10 percent of the applicable AMC will be charged until the subscriber resumes contributions and the account is reactivated. The circular mandates that CRAs implement the dormant-account tagging system starting July 1, 2026, with identification occurring in the first week of the subsequent quarter after the inactivity threshold is met.

Additionally, the PFRDA clarified that each pension scheme associated with a Permanent Retirement Account Number (PRAN) will be treated as a separate account. Consequently, Tier-I and Tier-II accounts under the same PRAN will incur distinct AMC charges where applicable.

Clarification on PRAN Opening Fees

The authority has also clarified the confusion regarding PRAN opening fees. The fee for generating a PRAN will be charged only once during the initial setup. No further fees will be incurred for activating or opening Tier-I or Tier-II accounts linked to an existing PRAN. Under the previous pricing model, government and private-sector subscribers paid Rs 18 for an e-PRAN kit and Rs 40 for a physical PRAN card, while APY and NPS-Lite subscribers were charged Rs 15 for opening fees.

The PFRDA has instructed CRAs to collect fees at the end of each quarter. For employer-sponsored accounts, invoices should be sent directly to the relevant entity, while for other subscribers, the applicable fees will be deducted from their pension account.

Implications for NPS Subscribers

This latest clarification seeks to address operational and pricing concerns raised after the September 2025 circular regarding CRA fee structures. Although Tier-II account holders may experience slightly increased maintenance costs due to alignment with Tier-I charges, the regulator has also introduced concessions for dormant accounts, low-balance subscribers, and APY and NPS-Lite users. Subscribers should be aware that prolonged inactivity could result in their accounts being tagged as dormant. CRAs are expected to implement these changes starting July 2026, making it crucial for investors to maintain regular contributions to keep their accounts active.