The Pension Fund Regulatory and Development Authority (PFRDA) has issued a comprehensive amendment to the Exits and Withdrawals under the National Pension System (NPS) Regulations, 2015. The revised rules, notified in the Official Gazette on 12 December 2025, bring significant clarity, updated thresholds, and new provisions benefiting Government, Non-Government, and NPS-Lite/Swavalamban subscribers.

These amendments—known as the PFRDA (Exits and Withdrawals under the NPS) Amendment Regulations, 2025—come into effect immediately upon publication.

Key Highlights at a Glance

Revised exit rules for Government, Non-Government, and NPS-Lite subscribers.
Updated lump-sum withdrawal limits and annuity purchase requirements.
Introduction of new provisions for:
- Deferred withdrawal or annuity purchase up to age 85
- Exit on renunciation of citizenship
- Exit rules for missing subscribers presumed dead
- Exit rules for specific-purpose NPS schemes
Increase in withdrawal thresholds for NPS-Lite and voluntary exits.
Clear differentiation between systematic lump-sum withdrawal (SLW) and systematic unit redemption.

Detailed Overview of the Amendments

Applicability Expanded

A new clause confirms that these regulations apply to all pension schemes under NPS, strengthening uniformity across Government, Corporate, All-Citizen Model, and NPS-Lite subscribers.

1. Exit Rules for Government Sector Subscribers

The revised Regulation 3 introduces the most significant changes for Central and State Government employees subscribed to NPS.

1.1 Superannuation / Retirement

Upon retirement:

Subscriber may remain in NPS until age 85.
On exit:
- Minimum 40% of accumulated pension wealth must be used to purchase an annuity.
- The balance may be taken as:
  - Lump sum
  - Systematic lump-sum withdrawal
  - Systematic unit redemption
  - Any other option approved by PFRDA

Special Relaxation Based on Corpus Size

Accumulated Wealth	Withdrawal Option
≤ ₹8 lakh	100% lump sum permitted
₹8–12 lakh	Up to ₹6 lakh lump sum; rest via SLW or annuity
> ₹12 lakh	Up to 60% lump sum; minimum 40% annuity

(See Table 1, Schedule-I of the Gazette)

1.2 Resignation / Dismissal

At least 80% of corpus must be used to buy an annuity.
Remaining can be withdrawn lump sum or via periodic methods.
If corpus ≤ ₹5 lakh, subscriber may withdraw 100%.

1.3 Death Before Superannuation

80% mandatory annuity for default annuity purchase.
Balance payable to nominee/legal heir as per chosen withdrawal mode.

Relaxation:

For corpus ≤ ₹8 lakh, nominee/legal heir may opt for full lump-sum withdrawal.

1.4 Default Annuity Structure

The default annuity includes:

Lifetime annuity for subscriber and spouse
Return of purchase price
Re-issuance of annuity to family members in priority order:
1. Mother
2. Father
Subsequently, return of purchase price to surviving children or legal heirs.

2. Exit Rules for Non-Government Sector Subscribers

Regulation 4 now provides distinct, simplified provisions for private sector, all-citizens, and corporate-sector subscribers.

2.1 Exit After 15 Years of Subscription / After Age 60 / On Employer-Mandated Retirement

20% mandatory annuity purchase.
Balance available for lump sum or SLW.

Relaxation Thresholds

Corpus ≤ ₹8 lakh → 100% lump sum permitted
Corpus ₹8–12 lakh → Up to ₹6 lakh lump sum

2.2 Voluntary Exit Before Eligibility

80% mandatory annuity.
Withdrawal relaxation if corpus ≤ ₹5 lakh (100% withdrawal allowed).

2.3 Death of Subscriber

100% payout to nominees/legal heirs.
They may choose annuity or SLW if desired.

2.4 Physical Disability

Exit treated on par with superannuation, subject to medical certification (disability >75%).

3. Exit Rules for NPS-Lite / Swavalamban Subscribers

Revised Regulation 5 adjusts withdrawal thresholds:

3.1 On Attaining Age 60

If corpus ≤ ₹2 lakh → 100% lump sum allowed.
If > ₹2 lakh → Up to 60% lump sum, 40% annuity mandatory.

3.2 Before Age 60

Up to 20% lump sum, remaining 80% annuity.

3.3 On Death

100% lump sum payable to nominee/legal heir.

(Refer Table 3, Schedule-I)

4. New Provisions Introduced

4.1 Exit on Renunciation of Citizenship

A new Regulation 5A allows:

Complete withdrawal of accumulated pension wealth when a subscriber ceases to be a citizen of India.

4.2 Subscribers Missing and Presumed Dead

Regulation 5B provides a structured process:

Step 1: Interim Relief

20% of accumulated wealth paid to nominee/legal heir after:
- FIR copy
- Police report confirming inability to trace subscriber
- Indemnity bond

Step 2: Final Settlement

Remaining 80% released once the court declares the subscriber presumed dead.

If Subscriber Returns Alive

Pension account continues.
Already paid interim 20% is adjusted from final withdrawal.

4.3 Exit & Withdrawal in Specific-Purpose Schemes

Regulation 4A states that for NPS schemes created for specific government purposes, exit rules will follow scheme-specific guidelines issued by PFRDA.

5. Revised Partial Withdrawal Rules

Partial withdrawals (Regulation 8) now include:

Permitted Uses

Higher education of children
Marriage of children
Purchase/construction of residential property
Medical treatment of self/spouse/children/parents
Settlement of loan obligations against lien on pension account (new)

Limits

Up to 25% of own contributions.

Frequency

Before age 60: Up to 4 withdrawals, minimum 4 years apart.
After age 60 (if subscriber continues NPS): withdrawals allowed every 3 years.

6. Tier-II Account Modifications

Tier-II is now explicitly linked to the Individual Pension Account.
It automatically closes upon exit and closure of Tier-I.

Conclusion

The 2025 Amendment Regulations significantly streamline NPS exit processes, expand subscriber-friendly flexibilities, and ensure more equitable treatment across Government and Non-Government sectors. The introduction of provisions for missing subscribers, citizenship renunciation, and scheme-specific exits marks an important modernization of NPS law.