Here is a breakdown of how these changes will impact your retirement savings:

1. Relief for Small Tier-II Balances

One of the most significant updates concerns the Annual Maintenance Charge (AMC) for Tier-II accounts.

• The Change: AMC for Tier-II accounts will now be aligned with Tier-I accounts of the same sector (Government or Private).
• The Benefit: To protect small investors, no AMC will be charged on Tier-II accounts where the accumulated balance is ₹1,000 or less at the end of any quarter.

2. Multi-Scheme Charges Under One PRAN

The circular clarifies that even if you hold a single Permanent Retirement Account Number (PRAN), each pension scheme under it is treated as a separate entity.

• The Impact: If you are invested in multiple schemes under one PRAN, a separate AMC will be applicable for each individual scheme account.

3. Massive Discount for Dormant Accounts

PFRDA has introduced a major concession for inactive subscribers.

• Definition: An account is marked as ‘Dormant’ if no contribution is received for four consecutive quarters.
• The Benefit: Once an account is identified as dormant, it will only attract 10% of the regular AMC. This reduced fee will apply until the account is reactivated.

4. Simplified PRAN Opening Fees

The authority has streamlined the registration costs:

• One-Time Cost: The PRAN opening fee is a one-time charge levied only at the initial stage.
• Zero Activation Fee: If you decide to open or activate additional accounts (Tier-I or Tier-II) under an existing PRAN, the activation charge will be zero.

5. How Charges Will Be Collected

The circular specifies that charges will be recovered at the end of every quarter.

• Method: The amount will either be billed to the employer (if they bear the costs) or recovered directly by canceling units from the subscriber’s account.
• Note: Zero-balance accounts under the Atal Pension Yojana (APY) and NPS-Lite will remain exempt from AMC.

Disclaimer: This report is based on the official circular issued by the PFRDA and public information as of May 2026. NPS is a market-linked investment; returns and charges are subject to regulatory changes. For specific details regarding your account, please visit the official NPS portal or consult your Nodal Office.

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