The Pension Fund Regulatory and Development Authority (PFRDA) has issued updated rules for exits and withdrawals under the National Pension System (NPS), effective December 2025. The amendments aim to streamline procedures, clarify definitions, and provide greater flexibility for subscribers across government, corporate, and all-citizen models.
Applicability across NPS schemes
All exit and withdrawal provisions now apply uniformly to every NPS account. Each subscriber can exercise exit options independently for each account, ensuring consistent treatment across all schemes, including government, corporate, NPS-Lite, and Swavalamban.
Definitions of exit and deferment
“Exit” is defined as the closure of an individual pension account, which can occur on retirement, superannuation, voluntary premature exit, or death.
“Deferment” allows subscribers to postpone lump-sum withdrawals or annuity purchases, extending the option to remain in the system up to age 85.
Exit rules for government and non-government subscribers
Government and non-government subscribers now follow separate frameworks:
Government subscribers can withdraw savings at retirement, superannuation, or in case of disability, subject to prescribed limits.
Non-government subscribers — including corporate and voluntary all-citizen participants — follow rules aligned with their subscriber category.
Withdrawal provisions for government subscribers
Up to ₹8 lakh: Full lump-sum withdrawal allowed.
₹8–12 lakh: Up to ₹6 lakh may be withdrawn as a lump sum; the remainder must be used for annuity purchase or phased withdrawals.
Above ₹12 lakh: Maximum 60% as lump sum; at least 40% must be used to buy an annuity.
Subscribers retain the option to defer annuity purchase or withdrawals, enabling continued participation in NPS beyond retirement.
Premature exit and annuity requirements
Voluntary exits before retirement or the minimum 15-year subscription require at least 80% of the corpus to be used for annuity, with a limited portion (generally 20% or less) available for lump-sum withdrawal.
Death of a subscriber
Nominees or legal heirs can claim the accumulated corpus in lump sum for smaller savings. For larger amounts, part of the corpus may be allocated to an annuity, with the remainder disbursed in lump sum or phased payments.
The amendments clarify the role of nominees and legal heirs, replacing earlier references to “family members.”
Missing subscribers and interim relief
If a subscriber is legally presumed dead, nominees may receive 20% of the corpus as interim relief. The remaining 80% is disbursed only after legal confirmation under the Bharatiya Sakshya Adhiniyam, 2023. Interim payments are adjusted if the subscriber is later found alive.
Withdrawal on cessation of Indian citizenship
Subscribers who renounce Indian citizenship can now close their NPS accounts and withdraw the full corpus.
Partial withdrawals
Partial withdrawals remain capped at 25% of the subscriber’s contributions and can be used for purposes such as loan repayment. These withdrawals are permitted even after retirement, subject to frequency limits.
Loans against NPS accounts
Subscribers can now pledge their NPS accounts to secure loans from regulated financial institutions, within limits prescribed by PFRDA, without compromising the retirement corpus.
NPS-Lite and Swavalamban subscribers
Full withdrawal is allowed for accumulations up to ₹2 lakh. For higher balances, a portion must be used to purchase an annuity, increasing the previous limit of ₹1 lakh.