National Pension System (NPS) Amendments 2025: 80% Lump-sum Withdrawal and Extended Exit Age

Key facts

• The Pension Fund Regulatory and Development Authority (PFRDA) notified amendments to the PFRDA Exits and Withdrawals Regulations, 2015, applicable to the National Pension System (NPS).
• The permissible lump-sum withdrawal at normal exit has been increased from 60% to 80%, while the mandatory annuity portion has been reduced to 20%.
• The maximum exit age for subscribers has been extended from 70 years to 85 years.
• For the All Citizen Model, normal exit is now permitted after 15 years of investment or upon reaching 60 years of age, whichever is earlier.
• The threshold for 100% lump-sum withdrawal for non-government subscribers has been raised from ₹5 lakh to ₹8 lakh.
• The mandatory 5-year minimum subscription period previously required for premature exit has been removed for non-government subscribers.
• New structured withdrawal mechanisms, namely Systematic Lumpsum Withdrawal (SLW) and Systematic Unit Withdrawal (SUR), have been introduced to allow periodic redemption of investment units.
• For government subscribers with a corpus between ₹8 lakh and ₹12 lakh, a lump-sum withdrawal of up to ₹6 lakh is permitted, with the remainder accessible via SUR.
• The list of permitted reasons for partial withdrawal has been liberalized to include medical treatment without restriction to a specific list of illnesses.