NPS Subscribers can now Withdraw 100% Amount on Exit

The Pension Fund Regulatory and Development Authority (PFRDA) has made important changes to the National Pension System (NPS).

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These new rules will benefit non-government employees the most.

Under the revised rules, private sector employees can now withdraw up to 80 percent of their NPS retirement fund at exit.

In some cases, they can even withdraw 100 percent of the amount in one go.

The new rules were officially notified on December 16, 2025.

The National Pension System was launched in 2004 for government employees.

In 2009, it was opened to everyone, including private sector employees and NRIs.

There are two types of NPS accounts:

Tier-I account: Mandatory retirement account

Tier-II account: Voluntary savings account

Any salaried person can invest in NPS, and now subscribers can stay invested up to the age of 85, unless they choose to exit earlier.

The withdrawal rules depend on the total pension fund value at the time of exit.

You can withdraw the entire amount as a lump sum.

Taking a pension is optional in this case.

You can withdraw up to ₹6 lakh at once.

The remaining amount can be:

Used to buy an annuity (monthly pension), or

Withdrawn gradually through Systematic Unit Withdrawal for at least 6 years.

If the fund is more than ₹12 lakh

You must use 20 percent of the amount to buy an annuity.

The remaining 80 percent can be withdrawn immediately.

Earlier, non-government NPS subscribers had to invest 40 percent of their retirement fund in an annuity plan.

Now, this requirement has been reduced to just 20 percent.

This change gives investors more flexibility, higher lump-sum payouts, and better control over their retirement savings.

These new NPS rules make retirement planning easier and more flexible for private sector employees.

Investors now have more freedom to decide how much money they want as a lump sum and how much as pension.