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PFRDA Overhauls NPS Exits, Allowing Up to 80% Lump Sum for Non-Government Subscribers

The overhaul consolidates withdrawal rules into a single framework for easier use.

Overview

  • Mandatory annuity for non-government members drops to 20%, with slab rules allowing full withdrawal up to ₹8 lakh, up to ₹6 lakh or 80% for ₹8–12 lakh, and up to 80% above ₹12 lakh.
  • A new Systematic Unit Redemption option enables phased withdrawal of the lump-sum portion over 6 to 15 years.
  • Subscribers can keep investing in NPS until age 85, with the option to defer lump-sum withdrawal or annuity purchase until 75.
  • NPS accounts can be pledged for loans from regulated lenders within PFRDA limits, and partial-withdrawal rules are liberalised with a 25% cap of own contributions and more permitted instances.
  • Premature exits generally require at least 80% of the corpus to buy an annuity unless the corpus is small (full withdrawal allowed up to ₹5 lakh), while government-employee provisions remain stricter with a 40% annuity and a five-year lock-in.