National Pension System (NPS) allows 80% lump sum withdrawal for non-government subscribers

Key facts

• The Pension Fund Regulatory and Development Authority (PFRDA) notified the amended PFRDA (Exits and Withdrawals under the National Pension System (NPS)) Regulations, 2025, on December 16.
• Eligible NPS members can now withdraw up to 80 per cent of their retirement corpus as a lump sum at the time of exit.
• The revised rules apply to subscribers under the All Citizen Model and Corporate NPS, bringing relief to non-government sector employees.
• The compulsory annuity purchase requirement for non-government subscribers has been reduced to a minimum of 20 per cent of the accumulated pension wealth.
• Subscribers with accumulated pension wealth up to Rs 8 lakh can withdraw the entire amount as a lump sum.
• For accumulated pension wealth between Rs 8 lakh and Rs 12 lakh, lump sum withdrawal is capped at Rs 6 lakh, with the balance available for annuity purchase or systematic unit withdrawal over a period of up to six years.
• For accumulated pension wealth above Rs 12 lakh, at least 20 per cent of the corpus must be used to purchase an annuity, while up to 80 per cent becomes available for withdrawal.