How NPS plans to make your retirement easier
What's the story
The Pension Fund Regulatory and Development Authority (PFRDA) has announced a major change in the National Pension System (NPS). The regulator has launched new retirement income schemes (RIS) and drawdown facilities. These changes will permit subscribers to withdraw their retirement corpus in phases after retirement while keeping the remaining funds invested. The move aims to give subscribers more flexible periodic payout options during their decumulation phase, while supporting corpus appreciation through the retirement income schemes.
Flexible payouts
Withdrawals won't affect mandatory annuitization requirement
The new withdrawal options under the NPS will be available to both government and non-government subscribers. Subscribers will be able to receive periodic payouts on a monthly, quarterly or annual basis until they turn 85. This flexibility is based on the option chosen at the time of exit from pension system. PFRDA said these withdrawals will not affect mandatory annuitization requirement of 20% or 40% of corpus, thus ensuring that a minimum statutory requirement for a lifelong pension remains intact.
Withdrawal strategies
Two options under drawdown facility
Subscribers under RIS framework can withdraw their pension corpus in a phased manner through a drawdown option of their choice. There are two options: Systematic Payout Rate (SPR) and Systematic Unit Redemption (SUR). In SPR, the withdrawal amount is determined based on the current age of the subscriber and how long they want to continue withdrawals till 85 years. Meanwhile, in SUR, total units are evenly spread over the entire drawdown tenure, with fixed number of units redeemed each month.
Implementation timeline
Guidelines will be announced soon
The PFRDA has said that the effective date for these guidelines will be announced once the required technical systems and operational frameworks are in place. The regulator had more than 21.7 million subscribers and more than ₹16 trillion in assets under management as of March 2026, according to the latest data.