What happened: PFRDA revised NPS exit rules allow full withdrawal without compulsory annuity purchase up to ₹8 lakh
The Pension Fund Regulatory and Development Authority (PFRDA) revised National Pension System (NPS) exit rules for some subscribers. A central change is the ability to withdraw the entire NPS corpus up to ₹8 lakh without compulsory purchase of an annuity.
Background: NPS retirement benefits are commonly converted into income via annuities
NPS retirement planning typically ends with conversion of part of the NPS corpus into an annuity from life insurers—an insurance product that can provide lifetime income (periodic income during the annuitant’s life, subject to contract terms).
What changed now: the choice set for exit depends on corpus size
PFRDA’s revised exit framework creates different practical options by corpus size. For larger NPS corpuses, the discussion highlights a wider choice set, such as: deferring exit (delaying withdrawal), withdrawing a portion and annuitising the remaining part, or continuing the NPS account without further contributions.