Updated NPS rules: 10 key changes you must know about NPS accumulation, growth and withdrawal

The Pension Fund Regulatory and Development Authority (PFRDA) has implemented several important revisions to the National Pension System (NPS) rules. These changes impact government, non-government, and NPS-Lite Swavalamban subscribers.

Here are 10 key updates outlined in the PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025:

**Key NPS Updates**

• Increased Age Limit:** Subscribers can now remain in the NPS until the age of 85, extending the previous limit of 75 years. This applies to both government and non-government employees.
• Annuity Purchase Revision:** Non-government sector subscribers now have the option to purchase an annuity with just 20% of their Accumulated Pension Wealth (APW) upon superannuation or under specific conditions. Previously, individuals were required to use 40% of their corpus to purchase an annuity if their accumulated corpus exceeded Rs 5 lakh.
• Full Withdrawal Threshold:** Both government and non-government subscribers can withdraw their entire corpus as a lump sum if the total amount is equal to or less than Rs 8 lakh.
• Systematic Unit Redemption:** A new withdrawal method, Systematic Unit Redemption, has been introduced. This allows government and non-government subscribers to withdraw units from their NPS corpus systematically over a period of at least six years.
• New Corpus Slabs:** The rules now include new lump sum withdrawal slabs. Subscribers with a corpus of less than or equal to Rs 8 lakh can withdraw up to 100% of their retirement savings upon reaching 60 years of age or under certain specified circumstances. A separate slab exists for corpus amounts greater than Rs 8 lakh but less than or equal to Rs 12 lakh.
• Increased Withdrawal Frequency Before 60:** NPS subscribers can now make up to four withdrawals before the age of 60, superannuation, or retirement (whichever occurs later). A minimum gap of four years between each withdrawal is mandatory. The previous limit was three withdrawals.
• Withdrawals Post-60:** Subscribers who continue their NPS accounts beyond the age of 60 or after superannuation/retirement can make partial withdrawals with a minimum interval of three years between each withdrawal. The withdrawal amount should not exceed 25% of the subscriber's contribution (or own contribution if there are multiple contribution streams).
• Exit Due to Citizenship Renunciation:** If an NPS subscriber ceases to be an Indian citizen, they can close their individual pension account and withdraw the entire accumulated pension wealth in a lump sum.
• Rules for Missing Subscribers:** The regulations clarify the process for handling pensions when an NPS subscriber is missing and presumed dead. The nominee(s) or legal heir(s) will receive 20% of the accumulated pension wealth as interim relief in a lump sum. The remaining 80% will remain invested and paid out upon legal confirmation of the subscriber's presumed death, as per the Bharatiya Sakshya Adhiniyam, 2023.
• Account-Centric Approach:** The updated regulations replace references to 'Permanent Retirement Account' with 'each individual pension account,' reinforcing individual account ownership, particularly for subscribers with multiple accounts.