The Pension Fund Regulatory and Development Authority (PFRDA) has offered operational relief to certain government-linked organisations under the National Pension System (NPS) by allowing them to continue using Point of Presence (PoP) services on payment of a fixed annual charge.

In a circular issued on June 16, 2026, the pension regulator said that Government Entities can avail PoP services by paying a flat fee of ₹500 per subscriber per year. The move comes as a significant relaxation of rules introduced earlier this year that required such entities to directly manage several NPS-related functions through Central Recordkeeping Agency (CRA) systems.

Why did PFRDA issue the clarification?

The latest decision follows a March 10, 2026 circular in which PFRDA reclassified certain organisations as "Government Entities" under NPS. Under the revised framework, these entities were expected to have the technical and operational capability to directly handle NPS subscriber-related activities without depending on a PoP.

To qualify as a Government Entity, organisations were required to meet several conditions. These included mandatory NPS coverage for employees from a specified cut-off date, transfer of existing Superannuation Fund assets into the NPS framework within one year, and the ability to independently manage subscriber registration, contribution uploads, grievance redressal, withdrawals and other NPS transactions.

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However, PFRDA said it received representations from several organisations, particularly Central Public Sector Enterprises (CPSEs), highlighting operational challenges in immediately transitioning to a fully direct model.

Considering these concerns, the regulator decided to permit Government Entities to continue availing PoP services as an alternative arrangement.

What is a Point of Presence (PoP)?

A PoP acts as an intermediary between NPS subscribers and the pension system. It assists with account opening, contribution processing, subscriber updates, withdrawals and various service requests.

Traditionally, PoPs have played a key role in helping employers and subscribers manage administrative aspects of their NPS accounts. Under the March framework, Government Entities were expected to reduce dependence on such intermediaries and interact directly with CRA systems.

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What will be the annual charge?

Under the revised arrangement, Government Entities can continue using PoP services by paying a flat charge of ₹500 per subscriber annually.

PFRDA has clarified two possible modes of payment:

Employer-paid model: The organisation may bear the cost and make a consolidated payment directly to the PoP through a mutually agreed arrangement.
Subscriber-paid model: If the cost is to be borne by individual subscribers, the amount will be recovered through quarterly deduction of units from the subscriber's pension account.

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Which services are included?

The ₹500 annual charge covers a broad range of PoP-related services, including:

Opening NPS accounts
Subscriber registration and information uploads
Contribution remittances
Pension fund manager changes
Scheme preference modifications
Nomination updates
Partial withdrawal requests
Other routine subscriber transactions facilitated by PoPs

However, PFRDA clarified that the charge covers only PoP services and does not include fees payable to other intermediaries within the NPS ecosystem.

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What does this mean for Government Entities?

The decision provides flexibility for organisations that may not yet have the infrastructure, manpower or technology systems required to directly manage all NPS functions through CRA platforms.

For CPSEs and other eligible Government Entities, the move ensures continuity of services while allowing more time to strengthen internal systems and transition gradually to the direct operational model envisioned by the regulator.

The circular has come into effect immediately and has been issued under powers granted to PFRDA under Section 14 of the PFRDA Act, 2013. For thousands of NPS subscribers employed by such entities, the clarification helps ensure uninterrupted access to essential pension-related services without operational disruptions.

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Published on: Jun 24, 2026 1:14 PM IST