For years, a thoughtful investor appreciated the National Pension System as a reliable cornerstone for the future, yet often wished for a bit more creative freedom. The dream was simple: to keep a steady, conservative strategy for security while simultaneously exploring a bolder, equity-focused path with a different expert’s touch.
Today, that vision has become a reality. With the arrival of the Multiple Scheme Framework (MSF) on October 1, 2025, the PFRDA has unlocked a new era of flexibility. Non-government subscribers can now hold various investment styles under their existing PRAN for new contributions. It’s the perfect harmony of stability and growth, transforming retirement planning into a personalized journey that evolves exactly as you do.
The Myth of the Multiple NPS Account
In the past, your NPS account was a bit like a single-track railway. Once you chose your Pension Fund Manager (PFM) and your investment choice (Auto or Active), your entire corpus moved in that one direction. If you wanted to see how a different fund manager performed, or if you wanted to keep one "safe" bucket and one "risky" bucket, you were out of luck.
Because you can hold only one PRAN, investors previously felt limited to a single-scheme 'middle-of-the-road' strategy. You couldn't be aggressive with one portion of your savings and conservative with another. You had to pick a single blend for everything.
Diversification Within a Single PRAN
The Multiple Scheme Framework (MSF) is the solution to this long-standing limitation. It allows you to hold multiple distinct schemes under your existing PRAN.
Think of your PRAN as a digital suitcase. Previously, you could only pack one outfit (one scheme). With MSF, your suitcase now has multiple compartments. You can pack a formal suit for stability and hiking gear for high growth. You are still carrying one suitcase, but you are prepared for entirely different climates.
Key Pillars of the Multiple Scheme Framework Approach
- Fund Manager Freedom: You are no longer tethered to a single PFM. You can allocate 50% of your contributions to PFM A’s balanced fund and 50% to PFM B’s specialized equity fund.
- No More Equity Caps: While traditional NPS accounts cap equity at 75%, specific schemes under MSF allow for 100% equity exposure.
- Targeted Strategies: Fund managers can now launch "themed" schemes. You might choose a scheme specifically designed for "Dividend Yield" or "ESG Leaders," alongside your standard retirement pot.
Why Managing One PRAN is Better Than Multiple Accounts
Some investors still ask: "Why wouldn't I just want two different accounts?" The truth is, managing a multiple NPS account would be a nightmare for the average taxpayer. Here is why the MSF approach is superior:
- Unified Tax Reporting: Since everything stays under one PRAN, you only receive one consolidated statement. This makes filing your taxes under Section 80CCD(1B) incredibly simple.
- Seamless Portability: If you change jobs or move cities, you only have one account to update.
- Consolidated Compounding: Keeping your wealth in one place allows you to see the big picture of your retirement readiness without having to log into multiple portals and add up different balances.
- MSF keeps fees low: One PRAN means a single annual maintenance charge, with scheme-specific fund fees applied only to assets invested.
How to Use Multiple Scheme Framework Today
How should a modern investor actually use this new freedom? Here is a simple "Core and Satellite" strategy you can implement within your NPS account:
Stability
Allocate 70% to stable Common Schemes using Active Choice (e.g., heavy in Government Bonds and Corporate Debt) or Auto Choice lifecycle funds with a trusted PFM. This ensures your retirement foundation is solid.
Growth
Use the Multiple Scheme Framework for the remaining 30%. Pick a high-conviction, 100% equity scheme from a different PFM with a strong track record. This "satellite" portion works harder to beat inflation over the long run.
The Future is Modular
The introduction of the Multiple Scheme Framework marks the end of the "one-size-fits-all" era of retirement planning in India. By allowing deep diversification without the need for a multiple NPS account, the PFRDA has made the PRAN one of the most flexible and powerful investment tools in any citizen's portfolio.
You no longer have to compromise between safety and growth. With MSF, you can have both—organized, consolidated, and working together for your future.
Frequently Asked Questions (FAQs)
Q1: Can I open a second PRAN to try the MSF?
No. An individual is only allowed to have one PRAN. Attempting to open a multiple NPS account can lead to complications and deactivation of the accounts. MSF is designed so you can get all the variety you need within your existing account.
Q2: Does MSF affect my tax benefits?
Not at all. Your tax benefits are linked to your PRAN. Whether you invest in one scheme or five under the MSF, your total tax deduction remains the same under current IT laws.
Q3: Is it difficult to switch funds between different schemes in MSF?
The process is designed to be digital and user-friendly. You can manage your allocations through the CRA (Central Recordkeeping Agency) website or mobile app, just as you would change your PFM today.
Q4: Can I have different fund managers for different schemes?
Yes! This is the biggest advantage of MSF. You can diversify your "manager risk" by selecting different PFMs for your various schemes within the same PRAN.
Q5: Is MSF mandatory for everyone?
No. MSF is an optional framework. If you are happy with your current Auto or Active Choice settings, you don't have to change a thing. It is simply an added "choice" for those who want more control.
