If you invest in the National Pension System (NPS), this latest update can help you better understand the charges on your account.
The Pension Fund Regulatory and Development Authority (PFRDA) has clarified when, how,
and what type of charges will be applied. This step is expected to reduce confusion and make it easier for investors to track their pension costs.
The new rules were shared in a circular issued on April 29, and they explain that charges will now depend on different account types and situations.
What Has Changed?
One of the biggest updates is related to the Annual Maintenance Charge (AMC).
Now, the AMC for Tier II accounts will be the same as Tier I accounts. This means both government and private sector subscribers will be charged equally.
However, there is a small relief. If your Tier II account balance is up to ₹1,000, you will not have to pay any AMC.
Separate Charges for Each Account
If you have multiple accounts under the same PRAN (Permanent Retirement Account Number), keep this in mind.
Each account will be treated separately, and AMC will be charged individually for each one. This makes the structure more clear but could slightly increase costs for users with multiple accounts.
Rules for Dormant Accounts
An account will be marked as dormant if no contribution is made for four consecutive quarters (one year).
In such cases, only 10% of the AMC will be charged, which is a big relief compared to full charges.
Once you start contributing again, your account will become active from the next quarter.
These rules will come into effect from July 1, 2026.
PRAN and Other Charges Explained
The charge for opening a PRAN will be applied only once, at the time of initial registration.
After that, you won’t have to pay any extra fee for adding Tier I or Tier II accounts later. This makes account management simpler and more affordable.
Relief for APY and NPS-Lite Users
There is good news for users of Atal Pension Yojana (APY) and NPS-Lite.
If your account balance is zero, no AMC will be charged. This ensures that inactive or low-balance users are not burdened with unnecessary fees.
How Will Charges Be Deducted?
All charges will be collected at the end of each quarter.
They may be deducted directly from your account or collected through your employer, depending on how your account is managed.
