PFRDA NPS Amendment Regulations 2025 - Government Employee Benefits

📋 PFRDA NPS Amendment Regulations 2025

Important Changes to National Pension System Exit & Withdrawal Rules

Publication Date: December 12, 2025

Gazette No: 8421 GI/2025

Effective: From Publication Date

📥 Download PDF from eGazette

📌 Overview

The Pension Fund Regulatory and Development Authority (PFRDA) has announced significant amendments to the National Pension System (NPS) Exit and Withdrawal Regulations, 2015. These amendments, effective from December 12, 2025, bring important changes for all NPS subscribers - government sector employees, non-government sector workers, and self-employed individuals.

These regulations restructure how subscribers can exit the NPS and withdraw their accumulated pension wealth based on their employment category and financial situation.

🔄 Key Changes in 2025

Major Amendments:

✓ Subscriber Categorization: Clear classification into Government Sector, Non-Government Sector, and NPS-Lite/Swavalamban categories with specific exit rules for each.

✓ Revised Withdrawal Thresholds: New financial limits (₹8 lakh, ₹12 lakh for government; ₹5 lakh, ₹12 lakh for non-government sectors) for determining withdrawal options.

✓ Annuity Requirements: Government sector: 40-60% mandatory annuity purchase | Non-Government sector: 20-80% based on circumstances.

✓ Deferment Provision: Subscribers can now defer annuity purchase or lump sum withdrawal until age 85.

✓ Financial Assistance: New provision allowing subscribers to take loans from regulated financial institutions against their NPS account.

✓ Withdrawal Frequency: Before age 60: Up to 4 withdrawals with 4-year gap | After age 60: Multiple withdrawals with 3-year minimum gap.

✓ Missing Persons: New rules for subscribers presumed dead - 20% interim relief followed by full settlement.

👥 NPS Subscriber Categories

🏛️ Government Sector

Central/State government employees. Maximum age for exit: 85 years. Retirement-based exit rules apply.

💼 Non-Government Sector

Private employees and corporate sector workers. Minimum subscription period: 15 years or age 60 for normal exit.

👤 NPS-Lite/Swavalamban

Self-employed and voluntary subscribers. Exit at age 60 with lower withdrawal limits.

📊 Exit Rules by Category

🏛️ Government Sector Exit Options

On Superannuation/Retirement (Age 60+):

• APW ≤ ₹8 lakh: 100% as lump sum OR up to 60% lump sum + 40% annuity
• APW ₹8-12 lakh: Up to ₹6 lakh lump sum + balance in annuity/SBR for 6+ years
• APW > ₹12 lakh: Up to 60% lump sum + 40% minimum annuity

On Resignation/Dismissal:

• APW ≤ ₹5 lakh: 100% lump sum withdrawal allowed
• APW > ₹5 lakh: Up to 20% lump sum + 80% minimum annuity

💼 Non-Government Sector Exit Options

On 15 Years Subscription or Age 60+:

• APW ≤ ₹8 lakh: 100% lump sum OR up to 80% lump sum + 20% annuity
• APW ₹8-12 lakh: Up to ₹6 lakh lump sum + balance in annuity/SBR for 6+ years
• APW > ₹12 lakh: Up to 80% lump sum + 20% minimum annuity

Early/Voluntary Exit:

• APW ≤ ₹5 lakh: 100% lump sum
• APW > ₹5 lakh: Up to 20% lump sum + 80% minimum annuity

💰 Partial Withdrawal Provisions (Regulation 8)

Subscribers can make partial withdrawals from their accumulated pension wealth for:

• Purchase/Construction: Residential property in own name or jointly with spouse
• Medical: Treatment or hospitalization of self, spouse, children, parents
• Higher Education: Self or family members' higher education expenses
• Loan Settlement: Against lien/charge marked on NPS account

Limit: Maximum 25% of own contributions

Frequency: Before age 60: Up to 4 times (4-year gap) | After age 60: Multiple times (3-year gap)

⚠️ Important Updates

New Provisions:

• Deferment: Annuity purchase or lump sum withdrawal can be deferred until age 85
• Financial Assistance: Subscribers can avail loans from regulated financial institutions against NPS account
• Missing Persons: Nominees/legal heirs get 20% interim relief, 80% paid after legal presumption of death
• Citizenship: Non-citizens can withdraw entire accumulated wealth

Modified Rules:

• Tier II account automatically closes when individual pension account closes
• Family member definitions expanded to include legally adopted children
• References to "corpus" replaced with "wealth"
• Indian Evidence Act 1872 replaced with Bharatiya Sakshya Adhiniyam, 2023

📌 Special Scenarios

Death Before Exit:

• Government Sector: 80% mandatory annuity to family + 20% options
• Non-Government Sector: 100% lump sum to nominees/legal heirs

Physical Disability:

With disability certificate (>75% disability) from government surgeon, subscribers can exit with benefit options equivalent to normal retirement.

Late Joiners (Age 60+):

Non-government sector individuals joining at age 60+ can exit at age 85 with 20% mandatory annuity.

NPS-Lite/Swavalamban:

• APW ≤ ₹2 lakh: 100% lump sum OR 60% lump sum + 40% annuity
• APW > ₹2 lakh: 60% lump sum + 40% annuity minimum

👨‍💼 Who Should Know This?

• ✓ Central Government Employees (under CCS NPS Rules)
• ✓ State Government Employees
• ✓ Private Sector Employees
• ✓ Self-Employed Professionals
• ✓ NPS Account Holders approaching retirement
• ✓ Financial Advisors & Tax Consultants
• ✓ HR Professionals in Government/Corporate

⚖️ Disclaimer

This article is for informational purposes only. The content is based on the PFRDA Amendment Regulations 2025 published in Gazette No. 8421 GI/2025. For detailed information, please refer to the official government notification linked above or contact PFRDA directly.

Not Financial Advice: This blog does not provide investment, tax, or legal advice. Please consult with a qualified financial advisor before making any decisions regarding your NPS account.

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