📑 PFRDA (Exit & Withdrawals under NPS) Amendment Regulations, 2025

 🎯 Objective

To simplify, liberalise, and rationalise exit and withdrawal rules under NPS, ensuring:

• Clarity and uniformity across all subscriber categories (Government, Non-Government, Corporate, All Citizen, NPS-Lite).
• Greater flexibility for subscribers.
• Alignment with the Indian Evidence Act, 2023 for cases of missing and presumed dead subscribers.

📌 Applicability

These rules apply to:

1. Government Sector subscribers
2. Non-Government Sector subscribers
3. Corporate Sector subscribers
4. All Citizen Model subscribers
5. NPS-Lite / Swavalamban subscribers
6. Special Purpose NPS Schemes (as notified by PFRDA)

👉 Rules are now linked to Individual Pension Accounts, not just “retirement accounts”.

🔑 Revised Definitions

Exit means closure of an individual pension account due to:

• Retirement / superannuation
• Attaining 60 years or later
• Completion of minimum subscription period
• Premature exit
• Death or missing & presumed dead

👉 Each NPS account is treated separately if a subscriber holds multiple accounts.

Deferral Option:

• Lump sum withdrawal or annuity purchase can be postponed.
• Deferment allowed up to 85 years of age.

🏛 Government Sector Subscribers

A. Retirement

• Subscriber may remain in NPS till 85 years if exit option not exercised.
• Minimum 40% corpus → annuity.
• Balance → lump sum / structured withdrawal / combination.

Corpus-based relaxations:

• ≤ ₹8 lakh → 100% lump sum.
• ₹8–12 lakh → Lump sum up to ₹6 lakh; balance annuity/structured withdrawal.
• ₹12 lakh → Max 60% lump sum; Min 40% annuity.

B. Resignation / Removal / Dismissal

• Minimum 80% annuity compulsory.
• Balance → lump sum / structured withdrawal.
• Corpus ≤ ₹5 lakh → 100% lump sum permitted.

C. Death (Before Exit)

• Minimum 80% annuity for family.
• Balance → nominee(s)/legal heir(s).

Relaxations:

• ≤ ₹8 lakh → 100% lump sum.
• ₹8–12 lakh → Lump sum up to ₹6 lakh.

Default annuity:

• Subscriber + spouse (if any).
• Return of purchase price on death.

D. Disability / Invalid Retirement

• Treated same as retirement.
• Same annuity and lump sum rules apply.

🏢 Non-Government / Corporate / All Citizen Subscribers

A. Exit at 60 Years / After Minimum Subscription

• Minimum 20% annuity compulsory.
• Balance → lump sum / structured withdrawal.

Corpus-based relaxations:

• ≤ ₹8 lakh → 100% lump sum.
• ₹8–12 lakh → Lump sum up to ₹6 lakh.
• ₹12 lakh → Max 80% lump sum; Min 20% annuity.

B. Premature Exit

• Minimum 80% annuity compulsory.
• Corpus ≤ ₹5 lakh → full withdrawal allowed.

C. Death Before Exit

• Entire corpus payable to nominee(s)/legal heir(s).
• Options: Lump sum / structured withdrawal / annuity.

D. Joining NPS After 60 Years

• Minimum 20% annuity on exit.
• Corpus ≤ ₹12 lakh → full withdrawal allowed.
• On death → 100% corpus payable to nominees.

🌐 NPS-Lite / Swavalamban Subscribers

Exit at 60 Years

• ≤ ₹2 lakh → 100% lump sum.
• ₹2 lakh → Max 60% lump sum; Min 40% annuity.

Premature Exit

• ≤ ₹2 lakh → 100% lump sum.
• ₹2 lakh → Max 20% lump sum; Min 80% annuity.

Death

• 100% corpus payable to nominee(s).

💳 Partial Withdrawals (Tier-I)

• Quantum: Up to 25% of subscriber’s own contribution.
• Permitted Purposes:

• House purchase/construction (self/spouse).
• Medical treatment (self, spouse, children, parents).
• Loan repayment (against lien-marked NPS accounts).

Frequency:

• Before 60 years → Max 4 withdrawals; 4-year gap.
• After 60 years → Allowed; 3-year gap.

📂 Tier-II Account Clarifications

• Linked to individual pension account.
• Automatically closed when pension account is closed.
• Funds treated separately from Tier-I corpus.

🏦 Loans Against NPS

• Subscriber can create lien/charge on NPS account in favour of regulated financial institutions.
• Loan permitted within limits specified by PFRDA.
• Enables use of NPS savings as collateral.

⚖️ Missing & Presumed Dead Subscribers

• 20% corpus → immediate interim relief.
• 80% corpus → invested until legal declaration.
• After declaration under Indian Evidence Act, 2023 → final settlement as per exit rules.
• If subscriber found alive → interim relief adjusted at final exit.

🌍 Citizenship Renunciation

• If subscriber ceases to be Indian citizen:

• Account can be closed.
• Full corpus withdrawal allowed.

✨ Impact

• Enhances subscriber choice & dignity.
• Reduces hardship in low-corpus cases.
• Ensures family protection in death/missing cases.
• Makes NPS more flexible, humane, and practical, while retaining pension security.

📌 Prepared & Structured by:

A. Kesavan

Divisional Secretary & AGS

NFPE P3 Kanchipuram Division