New Delhi, Dec 17 (PTI) Pension regulator PFRDA has revamped the exit and withdrawal rules, allowing non-government subscribers of National Pension System (NPS) to withdraw up to 80 per cent of the fund accumulated at the time of exit.
The withdrawal limit earlier was up to 60 per cent of the accumulated pension wealth, and the remaining was expected to be utilised for buying an annuity, providing for a monthly or any other periodical pension.
Besides, the regulator has also raised the exit age to 85 years from 70 years earlier.
According to the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025, dated December 12, 2025, NPS accounts can now be pledged to obtain loans from regulated financial institutions within PFRDA-prescribed limits.
"The subscriber shall have the right to seek financial assistance from a regulated financial institution to the extent permitted...and for which purpose, the subscriber may make any assignment, pledge, contract, order, sale or security of any kind with respect to any benefit receivable under the National Pension System in favour of the lender," the Pension Fund Regulatory and Development Authority (PFRDA) said.
The new rules will come into force on the date of their publication in the Gazette, it added.
If the pension corpus is less than Rs 8 lakh, the subscriber has the option to withdraw the entire accumulated pension wealth in a lump sum or avail periodic payouts in the form of systematic lump sum withdrawal, systematic unit redemption or in accordance with other options approved by the authority.
The regulator has also increased the number of partial withdrawals from the earlier limit of 3 to a total of 4 partial withdrawals now, with a gap of four years between each interval.
After attaining the retirement age of 60 years, partial withdrawals are permitted three times with a minimum gap of three years.
By reducing the annuity component to 20 per cent, the regulator has provided greater freedom to NPS subscribers to utilise the fund accumulated as per their needs and requirements.
With regard to government sector subscribers, the exit age has been increased from 75 to 85. It means that subscribers can remain invested in the NPS until they turn 85 or exercise the option to exit.
They can withdraw 60 per cent of the corpus or ‘accumulated pension wealth – APW’, upon exit, and the remaining 40 per cent must be used to purchase the annuity.
The 60 per cent withdrawal can be done through a lump sum or a systematic lump sum withdrawal.
However, the government employees who exit prematurely due to resignation, removal, or dismissal must use 80 per cent of the APW to buy an annuity, and the remaining can be withdrawn as a lump sum.
In case the total APW is Rs 5 lakh or less, full withdrawal in a lump sum is permitted in normal exit, premature exit, or exit due to death.
Under the amended regulations, subscribers across the government, non-government, and NPS-Lite categories can stay invested in the NPS until age 85, unless they choose to exit earlier under the prescribed conditions.