PFRDA Introduces New Retirement Income Schemes and Drawdown Options Under NPS
PFRDA Introduces Retirement Income Schemes and Flexible Drawdown Options Under NPS
In a major relief for National Pension System (NPS) subscribers, the Pension Fund Regulatory and Development Authority (PFRDA) has issued a new circular introducing Retirement Income Schemes (RIS) and flexible Drawdown Options under NPS.
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As per the circular dated 15 May 2026, the new initiative aims to provide subscribers with greater flexibility in receiving retirement payouts while ensuring continued growth of their pension corpus.
Key Highlights of the Circular
Subscribers will now have the option to withdraw their pension corpus in a phased manner through different drawdown options.
The scheme allows periodic payouts on a:
Monthly basis
Quarterly basis
Annual basis
Payouts can continue up to the age of 85 years, depending on the choice exercised by the subscriber at the time of exit from NPS.
The facility will be available to both:
Government Subscribers
Non-Government Subscribers (NGS)
Major Benefit for Subscribers
One of the significant changes introduced through RIS is that withdrawals under the drawdown option will not require mandatory annuitisation of 20% or 40% of the corpus, as applicable earlier. However, the minimum statutory requirement for a lifelong pension will continue to remain protected.
Objective of the New Scheme
PFRDA stated that the initiative has been launched in line with the PFRDA (Exits and Withdrawals under the NPS) (Amendment) Regulations, 2025. The objective is to offer retirees more flexible income options after retirement while enabling the remaining corpus to continue earning returns.
Implementation
The guidelines will come into effect from the date notified by PFRDA after necessary system capabilities and operational frameworks are implemented.
The circular has been issued under the powers conferred by Section 14 of the PFRDA Act, 2013.