Pension Fund Regulatory and Development Authority (PFRDA) relaxes National Pension System (NPS) annuity surrender rules

Key facts

• The Pension Fund Regulatory and Development Authority (PFRDA) issued a circular on May 14, 2026, relaxing rules for the surrender of annuity policies under the National Pension System (NPS).
• Surrender is now permitted in cases of critical illness of the annuitant or their family members, and for annuity policies issued before October 24, 2024, that contain an explicit surrender clause.
• Annuity Service Providers (ASPs) are generally prohibited from accepting surrenders or cancellations except during the free-look cancellation period.
• The surrender process must align with the original policy contract and guidelines issued by PFRDA and the Insurance Regulatory and Development Authority of India (IRDAI).
• Approved surrender values are credited to the subscriber's bank account, and the information must be shared with the Central Recordkeeping Agency (CRA) within seven working days.