New Delhi: The National Pension System (NPS) now offers investors two investment structures — the traditional common schemes and the newer Multiple Scheme Framework (MSF). Both are designed for retirement savings but differ in flexibility, investment choices, and risk exposure.
Under the common schemes, the investment structure is straightforward. Subscribers choose either the Active Choice or Auto Choice option and invest in a single scheme within each tier of the NPS account. Asset allocation is typically divided across equities, corporate bonds, and government securities. These schemes are simple, low-cost, and suitable for investors who prefer a stable and predictable retirement investment approach.
The Multiple Scheme Framework (MSF), introduced in October 2025, gives investors greater flexibility. It allows subscribers — especially those in the non-government sector — to invest in multiple schemes under one NPS account and diversify their retirement portfolio more effectively.
One of the biggest changes under MSF is the higher equity investment limit, which can go up to 100 percent, compared with the 75 percent cap in traditional NPS schemes. This makes MSF more suitable for younger investors or those with a higher risk appetite who want to focus on long-term wealth creation.
However, MSF schemes also come with slightly higher management charges and a minimum vesting period of around 15 years for certain investments. Because of this, they are generally considered better suited for long-term retirement planning rather than short-term goals.
Importantly, the traditional NPS common schemes will continue alongside MSF options. Investors can choose between them depending on their risk tolerance, investment horizon, and retirement goals.
Overall, while common schemes focus on simplicity and stability, the MSF offers flexibility, diversification, and potentially higher growth opportunities, making the choice largely dependent on an individual investor’s financial strategy.
