PFRDA Explains New NPS Exit Rules: A Simple Guide for Subscribers

A few days after formally notifying amendments to the NPS Exit and Withdrawal Regulations, 2015 through a gazette notification, the Pension Fund Regulatory and Development Authority (PFRDA) has issued a detailed press release explaining the changes in a simpler and more accessible manner.

While the regulatory amendments are already in force, this press note—dated 19 December 2025—serves as a plain-language guide to help NPS subscribers clearly understand what has changed, why it matters, and how it impacts different categories of subscribers, including government employees, private sector workers, senior citizens, and NPS-Lite participants

Big Shift: Greater Flexibility for Non-Government NPS Subscribers

The most significant changes apply to the non-government sector, covering:

• All Citizen Model
• Corporate Sector
• Both Common Schemes (CS) and Multiple Scheme Framework (MSF)

Lock-In and Vesting: A Major Relaxation

Aspect	What Changed
Lock-in period (All Citizen Model)	Completely removed
Vesting period for normal exit	15 years or age 60 (whichever is earlier)
Corporate Sector vesting	No change (till retirement/superannuation)

This change recognises that non-government participation in NPS is voluntary and should offer greater autonomy.

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Normal Exit: Higher Lumpsum Limits Explained Simply

Earlier, most non-government subscribers were restricted to 60% lumpsum at exit. That ceiling has now been raised to 80%, with graded options based on corpus size.

Revised Normal Exit Options (Non-Government Sector)

Corpus Size	What You Can Do Now
Up to ₹8 lakh	Take 100% lumpsum or choose SLW/SUR
₹8–12 lakh	Take up to ₹6 lakh as lumpsum + balance via SUR (min 6 years) or annuity
Above ₹12 lakh	Take up to 80% lumpsum, minimum 20% annuity

This is one of the most subscriber-friendly changes introduced so far.

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Premature Exit: Structure Retained, Thresholds Improved

The core structure for premature exit remains intact, but higher corpus limits now allow full withdrawal in more cases.

Corpus	Revised Rule
Up to ₹5 lakh	100% lumpsum or SLW/SUR
Above ₹5 lakh	Up to 20% lumpsum + minimum 80% annuity

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Exit Due to Death: Additional Flexibility Introduced

• 100% lumpsum remains permitted
• Annuity remains optional
• Newly allowed: SLW or SUR options for nominees

This provides families greater flexibility in managing the pension corpus.

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Individuals Joining NPS After Age 60: Simplified Exit Rules

The press release clearly highlights the complete removal of the vesting period for those joining NPS after 60.

Key takeaways:

• No waiting period for normal exit
• Lumpsum limit increased to 80%
• 100% withdrawal allowed up to ₹12 lakh
• Premature exit provisions no longer apply

This makes NPS significantly more attractive for late entrants and senior citizens.

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Government Sector: Core Structure Retained, More Flexibility at Lower Corpus

For government employees, the familiar 60:40 lumpsum–annuity structure continues. However, additional flexibility has been introduced for smaller pension corpus amounts.

Corpus Level	Revised Option
Up to ₹8 lakh	100% lumpsum or SLW/SUR
₹8–12 lakh	Up to ₹6 lakh lumpsum + SUR/annuity
Above ₹12 lakh	Existing 60% lumpsum + 40% annuity

Premature exit and death-related provisions largely remain unchanged, ensuring pension discipline.

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Other Important Clarifications Highlighted in the Press Release

Entry and Exit Age Extended

• Maximum entry age increased to 85 years
• Exit age also extended to 85 years

Automatic Continuation Made Default

• Earlier 15-day advance intimation requirement removed
• Subscribers will automatically continue under NPS unless they choose to exit

Loans Against NPS Corpus Explained

• Subscribers can now seek loans from regulated financial institutions
• Lien allowed up to 25% of own contribution
• Subject to PFRDA guidelines

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Partial Withdrawal Rules: What Changed in Plain Terms

The press release clarifies both frequency and purpose of partial withdrawals:

• Maximum 4 withdrawals before age 60
• Minimum 4-year gap between withdrawals
• Medical withdrawals broadened beyond a fixed illness list
• Housing withdrawal clarified as one-time
• Skill development and startup purposes removed
• New purpose added: Loan settlement against NPS lien

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NPS-Lite Subscribers: Higher Thresholds, Same Structure

For NPS-Lite:

• Full withdrawal limit increased to ₹2 lakh
• Existing annuity structure otherwise remains unchanged

View PFRDA Press Release: