PFRDA Introduces Retirement Income Schemes (RIS) Under NPS
PFRDA Introduces Retirement Income Schemes (RIS) Under NPS
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced Retirement Income Schemes (RIS) and new drawdown options under the National Pension System (NPS) to provide greater financial flexibility and regular income after retirement. The circular was issued on 15 May 2026 and is aimed at helping subscribers manage their pension corpus more efficiently after superannuation.
Download Retirement Income Schemes (RIS) Under NPS
What is the Objective of RIS?
The main objective of RIS is to allow NPS subscribers to receive periodic payouts from their accumulated pension wealth while keeping the remaining corpus invested for future growth. This initiative seeks to balance regular retirement income with continued market participation and long-term financial security.
According to the guidelines, subscribers can choose systematic withdrawal options instead of withdrawing the entire amount at once.
Key Features of the Retirement Income Scheme
1. Systematic Periodic Payouts
Subscribers can now receive payouts on a:
Monthly basis
Quarterly basis
Annual basis
This enables retirees to create a structured post-retirement income stream similar to a pension.
2. Two Drawdown Options
PFRDA has introduced two major methods for withdrawal of pension wealth:
A. Systematic Payout Rate (SPR)
Under SPR, subscribers receive periodic payouts based on age-linked payout percentages. The payout rate increases with age to ensure gradual withdrawal of pension wealth.
For example:
At age 60 – payout rate is 4%
At age 70 – payout rate is around 6.67%
At age 80 – payout rate is 20%
At age 84 – payout rate reaches 100%
The detailed payout structure is provided in Annexure-A of the circular.
3. Systematic Unit Redemption (SUR)
Under SUR, subscribers can redeem units systematically over a chosen drawdown period.
Illustrative example given by PFRDA:
Corpus: ₹80 lakh
NAV: ₹10
Total Units: 8,00,000
Drawdown Period: 25 years
Monthly payout frequency
Using the equal-unit method, approximately 2666.67 units can be redeemed every month. This method offers predictable withdrawals while allowing the remaining investments to continue growing.
Eligibility for the Scheme
The scheme is applicable for:
Government NPS subscribers
Non-Government Subscribers
Individuals opting for systematic payouts up to the age of 85 years
Subscribers can continue participating in the pension system while drawing periodic income from the accumulated corpus.
Asset Allocation Under RIS
PFRDA has also introduced an age-based “RIS Steady” asset allocation model. The equity exposure gradually reduces with increasing age, while allocation towards Government Securities rises.
For instance:
Equity allocation reduces from 35% at age 60
To 10% after age 75
Government securities allocation increases progressively up to 75%
This structure aims to reduce market volatility risks during advanced retirement years.
Residual Corpus Options
At the end of the drawdown period, subscribers may:
Withdraw the remaining corpus as lump sum
Continue under NPS withdrawal provisions
Purchase annuity products as per prevailing regulations
This provides flexibility depending on the retiree’s financial needs.
Benefits for NPS Subscribers
The new Retirement Income Scheme offers several advantages:
Regular income after retirement
Continued market participation
Better management of retirement savings
Flexible withdrawal choices
Reduced dependency on lump-sum withdrawals
Improved long-term financial planning
Implementation
PFRDA has directed all stakeholders, including Pension Funds and Central Recordkeeping Agencies (CRAs), to implement the necessary system changes for smooth rollout of the scheme. Detailed operational guidelines will be issued separately.
Conclusion
The introduction of Retirement Income Schemes (RIS) marks a major reform in the National Pension System. By enabling structured withdrawals and flexible payout mechanisms, PFRDA aims to strengthen retirement planning and provide sustainable post-retirement income for NPS subscribers across India.