Pension fund regulator PFRDA has announced historic changes to the National Pension System (NPS) and new rules for government and non-government subscribers. Under the “PFRDA Exit and Withdrawal Amendment Regulations 2025,” employees will now have greater freedom to continue investing, withdraw funds, and choose their pension after retirement.
Most importantly, the entire corpus up to ₹8 lakh can now be withdrawn at once, and the investment age limit has been raised to 85 years. This decision is a lifeline for subscribers who want to grow their funds even after retirement, in line with market growth.
Money will grow even after retirement
PFRDA has increased the maximum age limit for exiting the NPS from 75 to 85 years. This means that government employees can continue to invest in the market for the next 25-30 years after retirement. Experts believe that continuing to invest for a long time significantly increases your retirement corpus, which ultimately increases the amount of pension you receive.
Upon reaching the age of 85, subscribers must invest at least 40% of their total deposit to purchase an annuity, ensuring a lifelong pension. During this period, they can withdraw the remaining 60% in a lump sum or in installments, depending on their needs.
100% Withdrawal Up to ₹8 Lakh
Under the old rules, you could withdraw the entire corpus at once only if your total fund at the time of retirement was less than ₹5 lakh. However, the government has now increased this limit to ₹8 lakh. If your total PF or pension fund at the time of retirement is ₹8 lakh or less, there is no legal obligation to purchase an annuity.
You can withdraw your entire corpus at once and use it for your family’s needs or other safe investments. This change is a significant relief, especially for employees with short service periods and a fund that hasn’t yet grown significantly.
Systematic Unit Redemption (SUR)
For the first time, the Systematic Unit Redemption (SUR) option has been introduced in NPS, which works much like a mutual fund’s SWP. Under this scheme, subscribers can withdraw a fixed portion of their investment at regular intervals. If your total accumulated funds are more than ₹8 lakh and up to ₹12 lakh, you have three compelling options.
In the first option, you can withdraw ₹6 lakh in one go and the remaining amount in installments through SUR, without the obligation to purchase an annuity. In the second option, you can take ₹6 lakh in one go and purchase an annuity with the remaining amount. In the third, the traditional option allows you to take 60% in one go and receive an annuity for at least 40%.
Immediate financial assistance to families
The PFRDA has implemented a very sensitive, humanitarian initiative for families whose members go missing. If an NPS subscriber goes missing, their nominee or legal heir will no longer have to wait for years.
According to the new rules, 20% of the total deposit will be immediately disbursed to the family as interim relief upon reporting the missing person. The remaining 80% will be made available after the person is declared dead under the law. Previously, this process involved many legal complexities, but now it has been simplified in favor of subscribers.
