The government has made major changes in the rules related to the National Pension System i.e. NPS. The Pension Fund Regulatory and Development Authority (PFRDA) has implemented new exit and withdrawal rules in 2025, the aim of which is to give more freedom and better options to government employees at the time of retirement. With these changes, pension planning has now become more flexible and easier than before.
Age to stay in NPS now up to 85 years
The biggest change is that now government NPS subscribers can continue investing in their NPS account till the age of 85 years instead of 75 years. This means that even after retirement, their money can continue to grow for a long time. On completion of 85 years of age, the subscriber will have to invest at least 40 percent of his total corpus in annuity, so that he can get regular pension. There will be an option to withdraw the remaining amount in lump sum or in installments.
100% withdrawal facility for those with small corpus
Another big relief for government employees is that now the entire NPS corpus of up to Rs 8 lakh can be withdrawn on retirement. Earlier this limit was only Rs 5 lakh. This means that employees whose retirement fund is small will not be forced to take annuity and they can withdraw the entire amount at once.
New options on corpus of Rs 8 to 12 lakh
If the NPS corpus of a government employee is more than Rs 8 lakh and up to Rs 12 lakh, then he will now have many options. He can withdraw up to Rs 6 lakh in lump sum and can take the remaining amount either in installments or buy annuity from it. Apart from this, if he wants, he can also withdraw 60 percent of the total corpus and make pension arrangements from the remaining 40 percent.
Start of Systematic Unit Redemption
For the first time, the option of Systematic Unit Redemption i.e. SUR has been added to NPS. Under this, the subscriber can withdraw money regularly by selling some units of his investment at a fixed time. This is beneficial for those people who do not want to withdraw a large amount at once and want to use the funds gradually. This reduces the fear of running out of money even after living a long life.
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More protection for the family in case of death
It has also been made clear in the new rules that if an NPS subscriber dies and his corpus is between Rs 8 to Rs 12 lakh, then the nominee can withdraw a lump sum of up to Rs 6 lakh. The remaining amount can be received through SUR. This provides immediate financial help to the family and also ensures future security.
Rules for employees who are missing or presumed dead
If an NPS subscriber goes missing, his nominee or legal heir will be given 20 percent of the total deposited amount as immediate relief. The remaining 80 percent amount will be kept safe and will be given after the person is declared dead as per the law. This will provide financial support to the family in the initial period.
Why are these changes important?
These new rules of NPS give more options, better flexibility and more control to government employees after retirement. Longer investment periods, higher withdrawal limits and new options like SUR make retirement planning stronger than ever.
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