The Pension Fund Regulatory and Development Authority (PFRDA) has released an exposure draft proposing amendments to its 2015 regulations on exits and withdrawals from the National Pension System (NPS). The proposed changes aim to provide subscribers with greater flexibility and more options for managing their pension wealth. Key proposals include redrafting the definition of ‘Exit’ to cover new schemes like NPS Vatsalya, increasing the age limit for NPS entry and exit, and removing the requirement for prior intimation when deferring lump-sum and/or annuity withdrawals. The draft also suggests enhancing the permissible limits for lump-sum withdrawals, introducing an option for systematic unit redemption, and increasing the proportion of lump-sum withdrawals for non-government subscribers upon retirement. Other notable amendments cover partial withdrawal limits, exits in case of citizenship renunciation, and a provision for subscribers to seek financial assistance from regulated institutions against their pension accounts. The PFRDA has invited public comments on these proposed changes until October 17, 2025.
Pension Fund Regulatory and Development Authority
Exposure Draft – Amendments to Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015
Date: 16 September 2025
In exercise of its mandate to protect the interests of subscribers, the PFRDA proposes to amend the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015. The proposed amendments are aimed at expanding coverage of exit scenarios, easing out operational processes and providing greater flexibility/choice to subscribers in managing their pension wealth across different stages of their lifecycle in line with their evolving needs. The following are some of the key areas which are proposed for revision:
a. Redrafting of definition of ‘Exit’ to cover various scenarios, including exit from NPS Vatsalya, schemes of Pension Funds being introduced for non-government sector.
b. Stipulation of exit provisions in respect of schemes of Pension Funds being introduced for non-government sector.
c. Increase in the age limit for entry into and exit from NPS, with automatic continuation.
d. Removal of requirement for prior intimation by subscribers in case of deferment of lumpsum and/or annuity.
e. Enhancement of permissible limit for lumpsum withdrawal by subscribers, where the accumulated pension wealth is below the specified threshold.
f. Introduction of option to avail systematic unit redemption in cases where accumulated pension wealth is below the specified threshold.
g. Enhancement of proportion of lumpsum withdrawal by non-government sector subscribers upon attaining age of 60 years/retirement.
h. Removal of vesting period for normal exit in cases where individuals join NPS after 60 years of age.
i. Enabling provision for subscribers to seek financial assistance from regulated financial institutions against their individual pension account.
j. Revision of partial withdrawal limits, frequency and purpose and introduction of ant option to avail partial withdrawal post attaining the age of 60 years/retirement.
k. Stipulation of Exit provisions in case of renunciation of citizenship.
l. Stipulation of Exit provisions under NPS-Vatsalya.
2. The Exposure Draft containing the proposed amendments as placed at Annexure A is open for stakeholder consultation and the same can be accessed at PFRDA website at: “Regulatory Framework → Exposure Draft”. The comments/views/suggestions are invited on or before 17 October 2025.
3. Stakeholders can furnish their comments through the online webform accessible at pfrda.org.in . Alternatively, comments can also be furnished via email in the format provided below at review-reg@pfrda.org.in :
| Sl. | Regulation No. | Existing Regulation | Proposed Changes to the Regulation |
Stakeholder Comments | Rationale for suggestion |
4. The existing Regulations notified by the PFRDA can be accessed on the PFRDA’s website under “Regulatory Framework → Compendium”
