In a circular, the Pension Fund Regulatory and Development Authority (PFRDA) said the initiative has been launched in line with the PFRDA (Exit and Withdrawal under NPS) (Amendment) Regulations, 2025.
According to the regulator, the new framework allows subscribers to opt for phased withdrawals from their designated pension corpus through periodic payout options during the accumulation-withdrawal phase. The authority said the move is intended to provide greater flexibility in managing retirement income while supporting continued growth of the remaining corpus.
Under the guidelines, withdrawals through these options will not affect the mandatory annuity purchase requirement of 20% or 40% of the corpus, depending on the applicable NPS exit rules. PFRDA said this ensures that the minimum statutory requirement for lifelong pension income remains intact.
The withdrawal options will be available to both government and non-government sector subscribers under NPS. Eligible subscribers will be able to receive periodic payouts on a monthly, quarterly or annual basis up to the age of 85 years, based on the option selected at the time of exit from the pension system.
The regulator also introduced a new lifecycle fund under the Retirement Income Schemes (RIS) category, named “RIS Steady (Balanced).” The scheme will follow a declining equity allocation structure, reducing equity exposure from 35% at age 60 to 10% by age 75, after which it will remain unchanged until age 85.
As per the allocation framework outlined by the regulator, exposure to government securities will increase progressively with age, while allocation to corporate bonds will also be adjusted gradually during the withdrawal phase.
PFRDA said the guidelines will come into effect from a date to be notified separately after the required operational systems are put in place.
