NPS Withdrawal Rules 2025: New PFRDA Exit & Amendment Guidelines Explained. PFRDA has notified NPS Exit and Withdrawal Amendment Regulations 2025. Know updated rules for government, private, corporate and NPS-Lite subscribers, annuity norms, lump sum limits, deferment options, death and missing cases explained in detail.
Explore the 2025 NPS amendment regulations by PFRDA. Learn about new withdrawal limits, systematic lump sum options, and rules for missing subscribers or citizenship changes. Understand the new NPS exit and withdrawal regulations 2025 by PFRDA
NPS/CPS Withdrawal Rules 2025 Applicability and Effective Date
- The amended regulations came into force from the date of publication in the Official Gazette, i.e., 12 December 2025.
- These rules apply to all exits and withdrawals from pension schemes under NPS, irrespective of sector.
- Published: December 15, 2025 (Official Gazette)
- Effective From: Date of publication in Official Gazette
- Notification Number: PFRDA/16/14/06/0009/2018-REG-EXIT
NPS/CPS Exit and Withdrawal Amendment Regulations 2025 – Detailed Analysis
These amendments replace several rigid provisions of the 2015 regulations, introduce clarity between individual pension accounts, expand withdrawal flexibility, redefine annuity obligations, and align processes with the Bharatiya Sakshya Adhiniyam, 2023.
Introduction: What's New in NPS Exit Regulations 2025?
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced significant amendments to the National Pension System (NPS) exit and withdrawal regulations through a notification dated December 12, 2025. These changes bring more flexibility and clarity to how subscribers can access their pension wealth upon retirement or exit from the system.
This article provides a comprehensive breakdown of the changes, clearly explained for:
- Government employees
- Private / corporate sector subscribers
- All Citizen Model (APY-style voluntary NPS)
- NPS-Lite & Swavalamban subscribers
Key Highlights of the NPS Amendment Regulations 2025
Revised Definition of "Exit"
The 2025 amendment clarifies that an "Exit" occurs when a subscriber chooses to close their individual pension account or opt out of a scheme. This can happen:
- Upon retirement or reaching 60 years of age.
- After subscribing for at least 15 years (for non-employment schemes).
- Upon premature closure as per regulations.
- In the event of death or if the subscriber is missing and presumed dead.
Enhanced Withdrawal Flexibility for Government Sector
Government sector subscribers now have refined options upon reaching superannuation (usually age 60), where they can remain in the NPS until age 85- Accumulated Wealth <= ₹8 Lakh: Option to withdraw 100% as a lump sum or through systematic payouts
- Accumulated Wealth > ₹8 Lakh to <= ₹12 Lakh: Can withdraw up to ₹6 Lakh as a lump sum. The balance must be used for periodic payouts (for at least 6 years) or an annuity
- Standard Exit: At least 40% must be used for a default annuity; the remaining 60% can be a lump sum or systematic withdrawal
New Rules for Non-Government Sector (All Citizen & Corporate)
Similar to the government sector, non-government subscribers can stay in the system until age 85Withdrawal Thresholds: If the corpus is $\le$ ₹8 Lakh, 100% can be withdrawn. If between ₹8 Lakh and ₹12 Lakh, a lump sum of up to ₹6 Lakh is permitted, with the remainder used for systematic unit redemption or annuity
Early Voluntary Exit: If a subscriber exits before the eligible period, 80% of the wealth must be used for an annuity unless the total wealth is $\le$ ₹5 Lakh, in which case 100% withdrawal is allowed
Systematic Lump Sum Withdrawal (SLW)
A significant feature of this amendment is the formal inclusion of Systematic Lump Sum Withdrawal and Systematic Unit Redemption. This allows subscribers to receive their non-annuity portion in periodic installments rather than one single payment, providing better cash-flow management in retirement.Partial Withdrawal & Financial Assistance
- Frequency: Subscribers under age 60 can withdraw up to four times with a minimum 4-year gap between each.
- Post-60 Withdrawals: Those staying in NPS after 60 can make partial withdrawals every 3 years.
- Lien for Loans: Subscribers can now use their NPS account as security to seek financial assistance from regulated institutions, which may mark a lien or charge on the account.
Government Sector Subscribers – Exit Rules Explained
Here is the short explanation table for Government sector subscribers in CPS under New PFRDA Exit Rules 2025.
✔ On Superannuation / Retirement / Premature Retirement
| Accumulated Pension Wealth | Lump Sum Withdrawal | Annuity Requirement |
|---|---|---|
| Up to ₹8 lakh | 100% allowed | Not mandatory |
| ₹8–12 lakh | Max ₹6 lakh lump sum | Balance via annuity / structured withdrawal |
| Above ₹12 lakh | Max 60% lump sum | Minimum 40% annuity |
Detailed Explanation table for Government sector subscribers in CPS under New PFRDA Exit Rules 2025
| Exit Scenario / Event | Accumulated Pension Wealth (APW) at the time of exit (₹) | Utilization of Accumulated Pension Wealth (APW) | ||
| Lump Sum (Entire Lump Sum or systematic lump sum withdrawal or systematic unit redemption or as per other approved option) | Systematic Unit Redemption for at least six years | Annuity | ||
| Upon retirement as per regulation 3(1)(a) (or) Upon discharge from service as per regulation 3(1)(d) | ≤ 8 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 60% | Not Applicable | At least 40% | ||
| > 8 lakh ≤ 12 lakh | Up to ₹6 lakh | Balance of APW remaining after lump sum | Not Applicable | |
| Or | ||||
| Up to ₹6 lakh | Not Applicable | Balance of APW remaining after lump sum | ||
| Or | ||||
| Up to 60% | Not Applicable | At least 40% | ||
| > 12 lakh | Up to 60% | Not Applicable | At least 40% | |
| Upon resignation / removal from service as per regulation 3(1)(b) | ≤ 5 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 20% | Not Applicable | At least 80% | ||
| > 5 lakh | Up to 20% | Not Applicable | At least 80% | |
| Upon death as per regulation 3(1)(c) | ≤ 8 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 20% | Not Applicable | At least 80% | ||
| > 8 lakh ≤ 12 lakh | Up to ₹6 lakh | Balance of APW remaining after lump sum | Not Applicable | |
| Or | ||||
| Up to ₹6 lakh | Not Applicable | Balance of APW remaining after lump sum | ||
| Or | ||||
| Up to 20% | Not Applicable | At least 80% | ||
| > 12 lakh | Up to 20% | Not Applicable | At least 80% | |
Subscribers may opt for:
- One-time lump sum
- Phased withdrawals
- Structured unit redemption
- Approved alternatives by PFRDA
✔ On Resignation / Dismissal / Removal
- Minimum 80% of corpus must be used for annuity
- Up to 20% lump sum allowed
- If corpus ≤ ₹5 lakh → 100% lump sum permitted
✔ On Death of Government Subscriber
- Minimum 80% annuity is mandatory
- Balance paid as lump sum
- If corpus ≤ ₹8 lakh → 100% lump sum allowed
🏦 Partial Withdrawals & Loans (Enhanced Flexibility)
Partial withdrawals up to 25% of own contributions
- Frequency: Subscribers under age 60 can withdraw up to four times with a minimum 4-year gap between each.
- Post-60 Withdrawals: Those staying in NPS after 60 can make partial withdrawals every 3 years.
- Lien for Loans: Subscribers can now use their NPS account as security to seek financial assistance from regulated institutions, which may mark a lien or charge on the account.
Permitted purposes expanded:
- House purchase/construction
- Medical treatment (self, spouse, children, parents)
- Loan repayment against pension account charge
Withdrawal frequency rationalised:
- Before 60 → Max 4 times with 4-year gap
- After 60 → Allowed with 3-year gap
NPS/CPS Withdrawal Rules 2025 FAQ
1. What are the NPS Exit and Withdrawal Amendment Regulations, 2025?
The NPS Exit and Withdrawal Amendment Regulations, 2025 are revised rules notified by PFRDA to update and simplify the exit, withdrawal, annuity, and deferment provisions under the National Pension System, replacing several rigid clauses of the 2015 regulations.
2. From when are the new NPS exit rules applicable?
The amended rules are effective from 12 December 2025, the date of publication in the Official Gazette.
3. Who are covered under these amended regulations?
These rules apply to:
- Government sector subscribers
- Non-government and corporate sector subscribers
- All Citizen Model (voluntary NPS) subscribers
- NPS-Lite and Swavalamban subscribers
4. What is meant by “Individual Pension Account” in the new rules?
Each NPS account held by a subscriber is now treated independently.
If a person has multiple NPS accounts, exit and withdrawal rules apply separately to each account, not collectively.
Each NPS account held by a subscriber is now treated independently.
If a person has multiple NPS accounts, exit and withdrawal rules apply separately to each account, not collectively.
5. What is “Exit” under the NPS Amendment Regulations, 2025?
“Exit” means closure of an individual pension account due to:
- Superannuation or retirement
- Attaining 60 years of age
- Completion of minimum subscription period
- Premature exit
- Death of subscriber
- Subscriber missing and presumed dead under law
Yes. Subscribers can now:
- Defer lump sum withdrawal
- Defer annuity purchase
- Continue NPS membership up to 85 years of age
7. What happens if a subscriber dies during the deferment period?
If lump sum withdrawal was deferred → Amount is paid to nominee/legal heir
If annuity purchase was deferred → Default annuity is compulsorily purchased for eligible family members
8. What are the exit rules for government employees on retirement?
Corpus up to ₹8 lakh → 100% lump sum allowed
Corpus between ₹8–12 lakh → Max ₹6 lakh lump sum, balance via annuity or structured withdrawal
Corpus above ₹12 lakh → Maximum 60% lump sum, minimum 40% annuity mandatory
9. Is annuity mandatory for government employees?
Yes, if accumulated pension wealth exceeds ₹8 lakh, a minimum annuity requirement applies, except where full lump sum is permitted due to lower corpus limits.
10. What are the NPS exit rules on resignation or dismissal (government sector)?
Minimum 80% of corpus must be used for annuity
Up to 20% lump sum allowed
If total corpus is ₹5 lakh or less, full lump sum withdrawal is permitted
11. What happens to NPS money if a government employee dies?
Minimum 80% of pension wealth is used for annuity
Remaining amount paid to nominee/legal heirs
If corpus is ₹8 lakh or less, 100% lump sum is allowed
