Key amendments in PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015
Amendments primarily aimed at the non-government sector, also rationalize provisions for government sector
Measures to provide subscribers greater flexibility, choice and autonomy in investment decisions and aid managing accumulated pension wealth
In furtherance of its mandate to promote old-age income security and protect the interests of subscribers, the Pension Fund Regulatory and Development Authority (PFRDA) has notified amendments to the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015, today.
The amendments are primarily aimed at the non-government sector (All Citizen Model and Corporate Sector), applicable uniformly to both Common Schemes and the Multiple Scheme Framework (MSF), while also rationalizing certain provisions for the government sector. Finalized after extensive stakeholder consultations, these measures aim to provide subscribers greater flexibility, choice and autonomy in investment decisions and managing their accumulated pension wealth, recognizing that non-government NPS participation is voluntary. Clear and well-structured exit provisions are expected to encourage entry and sustain participation by balancing subscriber needs and pension objectives across different stages of their life cycle.
Overall, the amendments reflect evolving subscriber needs and seeks to make the NPS more inclusive, responsive and subscriber-friendly, while safeguarding long-term retirement income security. The key areas that have been revised are outlined below in a comparative tabular format:
| Sl. | Earlier stipulation | Revised stipulation |
| I. Non-Government Sector (All Citizen Model and Corporate Sector) | ||
| Changes applicable uniformly to Common Schemes (CS) & Multiple Scheme Framework (MSF) | ||
| Lock-in period | ||
| 1 | All Citizen Model:
Minimum lock-in period to be eligible for premature exit → 5 years |
All Citizen Model (CS & MSF):
Minimum lock-in period removed |
| Normal Exit | ||
| 2 | All Citizen Model:
Vesting period → Till 60 years of age to be eligible for normal exit |
All Citizen Model (CS & MSF):
Vesting period → 15 years or till 60 years of age (whichever is earlier). |
| 3 | Corporate Sector:
Vesting period → Till age of retirement / superannuation |
Corporate Sector (CS and MSF):
Vesting period → Till age of retirement / superannuation (Remains same) |
| 4 | All Citizen Model & Corporate Sector:
Up to 60% lumpsum; At least 40% annuity |
All Citizen Model & Corporate Sector (CS & MSF):
Up to 80% lumpsum; At least 20% annuity |
| 5 | All Citizen Model & Corporate Sector:
For corpus ≤ ₹5 lakh → 100% lumpsum |
All Citizen Model & Corporate Sector (CS & MSF):
a) Corpus ≤ ₹8 lakh: 100% lumpsum or SLW or SUR (or) Up to 80% lumpsum & At least 20% annuity b) Corpus > ₹8 lakh ≤ ₹12 lakh: Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity. (or) Up to 80% lumpsum & At least 20% annuity c) Corpus > ₹12 lakh: Up to 80% lumpsum & At least 20% annuity |
| Premature Exit | ||
| 6 | All Citizen Model & Corporate Sector:
Up to 20% lumpsum; At least 80% annuity |
All Citizen Model & Corporate Sector (CS & MSF):
Up to 20% lumpsum; At least 80% annuity (Remains same) |
| 7 | All Citizen Model & Corporate Sector:
For corpus ≤ ₹2.5 lakh → 100% lumpsum |
All Citizen Model & Corporate Sector (CS & MSF):
a) Corpus ≤ ₹5 lakh: 100% lumpsum or SLW or SUR (or) Up to 20% lumpsum & At least 80% annuity b) Corpus > ₹5 lakh: Up to 20% lumpsum & At least 80% annuity |
| Exit due to Death | ||
| 8 | All Citizen Model & Corporate Sector:
100% lumpsum; Option for annuity, if desired. |
All Citizen Model & Corporate Sector (CS & MSF):
100% lumpsum; Option for annuity, if desired. (Remains same) Additionally, option for availing SLW or SUR.
|
| II. Individuals joining NPS after age of 60 years (All Citizen Model) | ||
| Normal Exit | ||
| 9 | Vesting period → 3 years to be eligible for normal exit | Vesting period removed |
| 10 | Up to 60% lumpsum;
At least 40% annuity |
Up to 80% lumpsum;
At least 20% annuity |
| 11 | For corpus ≤ ₹5 lakh → 100% lumpsum | a) Corpus ≤ ₹12 lakh:
100% lumpsum or SLW or SUR. (or) Up to 80% lumpsum & At least 20% annuity b) Corpus > ₹12 lakh: Up to 80% lumpsum & At least 20% annuity |
| Premature Exit | ||
| 12 | Up to 20% lumpsum;
At least 80% annuity |
Not applicable as the vesting period has been removed |
| Exit due to Death | ||
| 13 | 100% lumpsum permitted; Option for annuity, if desired. | 100% lumpsum permitted; Option for annuity, if desired. (Remains same)
Additionally, option for availing SLW or SUR. |
| III. Government Sector | ||
| Normal Exit | ||
| 14 | Up to 60% lumpsum;
At least 40% annuity |
Up to 60% lumpsum;
At least 40% annuity; (Remains same) |
| 15 | For corpus ≤ ₹5 lakh → 100% lumpsum | a) Corpus ≤ ₹8 lakh:
100% lumpsum or SLW or SUR (or) Up to 60% lumpsum & At least 40% annuity b) Corpus > ₹8 lakh ≤ ₹12 lakh: Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity. (or) Up to 60% lumpsum & At least 40% annuity c) Corpus > ₹12 lakh: Up to 60% lumpsum & At least 40% annuity
|
| Premature Exit | ||
| 16 | Up to 20% lumpsum;
At least 80% annuity |
Up to 20% lumpsum;
At least 80% annuity; (Remains same) |
| 17 | For corpus ≤ ₹2.5 lakh → 100% lumpsum | a) Corpus ≤ ₹5 lakh:
100% lumpsum or SLW or SUR (or) Up to 20% lumpsum & At least 80% annuity b) Corpus > ₹5 lakh: Up to 20% lumpsum & At least 80% annuity |
| Exit due to Death | ||
| 18 | Up to 20% lumpsum;
At least 80% annuity |
Up to 20% lumpsum;
At least 80% annuity; (Remains same) |
| 19 | For corpus ≤ ₹5 lakh → 100% lumpsum | a) Corpus ≤ ₹8 lakh:
100% lumpsum or SLW or SUR (or) Up to 20% lumpsum & At least 80% annuity b) Corpus > ₹8 lakh ≤ ₹12 lakh: Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity. (or) Up to 20% lumpsum & At least 80% annuity c) Corpus > ₹12 lakh: Up to 20% lumpsum & At least 80% annuity |
| IV. Other changes | ||
| Entry and Exit Age | ||
| 20 | Maximum entry age up to 70 years; exit age up to 75 years. | Entry and exit age increased to 85 years. |
| Automatic continuation | ||
| 21 | Subscriber to intimate 15 days prior to 60 / superannuation for continuation (Govt) or deferment of annuity and/or lumpsum (Govt & Non-Govt). | 15-day prior intimation requirement removed across sectors, hence subscribers can automatically continue under NPS. |
| Specific Purpose Scheme | ||
| 22 | – |
|
| Financial assistance against pension corpus | ||
| 23 | Assignment or pledge of NPS benefits void except where permitted by NPS Trust. |
|
| Frequency of Partial Withdrawal | ||
| 24 | During the tenure of subscription (i.e. before exit) →
|
i) Before 60 years age / superannuation (whichever is later):
ii) Post 60 years age / superannuation (whichever is later):
|
| Purpose of Partial Withdrawal | ||
| 25 | Purchase or construction of a residential house permitted if subscriber does not already own a house (other than ancestral property). | No change, but additionally clarified it as a one-time withdrawal. |
| Treatment of specified illness limited to a comprehensive list of specified critical illnesses (for subscriber / spouse / children / parents). | Broadened to medical treatment/hospitalization without a specified list (for subscriber/spouse/children/parents). | |
| Skill development, re-skilling, self-development activities (for subscriber). | Removed | |
| Establishing a start-up or own venture (for subscriber). | Removed | |
| New purpose | New purpose added: Settlement of a financial obligation of the subscriber taken from a regulated financial institution against lien/charge on NPS account. | |
| V. NPS-Lite | ||
| Normal Exit | ||
| 26 | Up to 60% lumpsum;
At least 40% annuity |
Up to 60% lumpsum;
At least 40% annuity; (Remains same) |
| 27 | For corpus ≤ ₹1 lakh → 100% lumpsum | a) Corpus ≤ ₹2 lakh:
100% lumpsum (or) Up to 60% lumpsum & At least 40% annuity b) Corpus > ₹2 lakh: Up to 60% lumpsum & At least 40% annuity |
| Premature Exit | ||
| 28 | Up to 20% lumpsum;
At least 80% annuity |
Up to 20% lumpsum;
At least 80% annuity; (Remains same) |
| 29 | For corpus ≤ ₹1 lakh → 100% lumpsum | a) Corpus ≤ ₹2 lakh:
100% lumpsum (or) Up to 20% lumpsum & At least 80% annuity b) Corpus > ₹2 lakh: Up to 20% lumpsum & At least 80% annuity |
| Exit due to Death | ||
| 30 | 100% lumpsum permitted; Option for annuity, if desired. | 100% lumpsum permitted; Option for annuity, if desired. (Remains same)
|
Note 1:
- Normal Exit → Exit upon,
- Completing 15 years of subscription or 60 years of age (whichever is earlier) (All citizen model);
- Superannuation / retirement (Government and Corporate Sector)
- Vesting period → Period of subscription required to become eligible for Normal Exit
- Premature Exit → Exit prior to completion of vesting period
- Lock-in period → Period of subscription required to become eligible for Premature Exit
- SLW → Systematic Lumpsum Withdrawal
- SUR → Systematic Unit Withdrawal
Note 2:
The changes tabulated above are some of the broad key amendments (indicative but not exhaustive) effected in the Exit Regulations. For complete detailed changes, PFRDA (Exits and withdrawals under the NPS) (Amendment) Regulations, 2025 may be referred @ https://www.pfrda.org.in/