Summary of this article
PFRDA increases NPS exit age from 75 to 85 years in the amended exit and withdrawal rules
Partial withdrawals increased to four times before age 60, three times after.
New relief: Missing and presumed dead subscribers' heirs get 20 per cent APW as interim aid.
The Pension Fund Regulatory and Development Authority (PFRDA) issued a gazette notification on December 16, 2025, and introduced changes to the National Pension System (NPS) exit and withdrawal rules. Now the new regulation will be called PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025. The amended rules are regarding exit and withdrawal for all subscribers, including the government sector, non-government sector, and other categories.
Here are the changes in the exit and withdrawal rules category-wise:
Government Sector Subscribers
PFRDA has increased the exit age from 75 to 85. it means that subscribers can remain invested in the NPS until they turn 85 or exercise the option to exit. They can withdraw 60 per cent of the corpus, say the ‘accumulated pension wealth – APW’, upon exit, and the remaining 40 per cent must be used to purchase the annuity. This rule has not changed. The 60 per cent withdrawal can be done through a lump sum or a systematic lump sum withdrawal.
However, the amendment has changed the sub-limit for withdrawal.
If the APW is under Rs 8 lakh, the subscriber now has the option to withdraw the entire amount in a lump sum.
If it is between Rs 8 lakh and Rs 12 lakh, the subscriber can withdraw up to Rs 6 lakh as a lump sum, and the remaining amount as systematic unit redemption (SUR) for at least six years or for an annuity.
However, the government employees who exit prematurely due to resignation, removal, or dismissal must use 80 per cent of the APW to buy an annuity, and the remaining can be withdrawn as a lump sum.
In case the total APW is Rs 5 lakh or less, full withdrawal in lump sum is permitted, in normal exit, premature exit, or exit due to death.
Non-Government Sector Subscribers
For non-government sector subscribers, the minimum 5-year subscription (lock-in) period has been removed. The vesting period, which was earlier ‘till 60 years of age’, has also been reduced to 15 years or till the age of 60, whichever is earlier. Upon normal exit, the non-government employees must use at least 20 per cent of the APW to buy an annuity and the remaining 80 per cent amount as a lump sum withdrawal.
Similar to the government sector, if the APW does not exceed Rs 8 lakh, they can withdraw the full amount in a lump sum or through SWP or SUR.
Upon premature exit, the rule has not changed. The subscriber is required to buy at least 80 per cent annuity and withdraw 20 per cent in a lump sum.
In case of death before exit, nominee(s), or legal heir(s) can withdraw the entire APW as a lump sum or SWP or SUR.
Partial Withdrawal For All Sectors
The amendment in the rules also clarifies partial withdrawal rules. Subscribers can withdraw up to 25 per cent of their own contribution from the APW, like the old rule. However, the frequency has increased.
• Before Superannuation Or 60 Years Of Age - The number of withdrawals has been increased from the earlier limit of three partial withdrawals to a total of four partial withdrawals now, with a gap of four years between each interval.
• After Superannuation Or 60 Years Of Age - After age 60 or superannuation, partial withdrawals are permitted three times with a minimum gap of three years.
People Who Join After Turning 60
The earlier vesting period of three years has been removed. For an APW of less than Rs 5 lakh, full withdrawal is allowed, and for more than Rs 5 lakh APW, 20 per cent annuity and 80 per cent lump sum is stipulated.
The premature exit rule is no longer applicable here, as there is no vesting period for those who join after 60 years of age. In case of death, the entire amount is payable to the nominee(s) or legal heir(s) as a lump sum, SWP, or SUR.
Missing Or Presumed Dead Subscribers
In addition to this, a new process has been introduced for cases where the subscriber is identified as missing and presumed dead. For such cases, nominee(s) or legal heir(s) will be eligible to receive 20 per cent of the APW as a lump sum as an interim relief, once they submit an FIR and a police report confirming that all efforts have been made, but the subscriber is not traceable. The remaining 80 per cent APW will remain invested and be paid only when a competent court declares that the subscriber is presumed to be dead under the provisions of the Bharatiya Sakshya Adhiniyam, 2023.
These changes are effective from today, December 15, 2025.
