The Pension Fund Regulatory and Development Authority (PFRDA) on Friday announced a new retirement income scheme and drawdown options under the National Pension System (NPS), aimed at giving subscribers greater flexibility in managing their pension savings after retirement.
In a circular dated May 15, 2026, the pension regulator announced the launch of Retirement Income Schemes (RIS) and drawdown options for NPS subscribers. The move builds on earlier circulars and follows amendments to the PFRDA (Exits and Withdrawals under the NPS) Regulations, 2025.
Under the new framework, subscribers will be able to withdraw a designated portion of their pension corpus in phases through different drawdown options during the decumulation phase. The regulator said the initiative is intended to provide periodic payout choices while allowing the remaining corpus to continue generating returns through RIS.
The authority clarified that withdrawals made under the RIS framework will not affect the mandatory annuitisation requirement under NPS. Subscribers are still required to use the minimum prescribed portion of their corpus – 20 per cent or 40 per cent, depending on the category – for purchasing an annuity to ensure a lifelong pension.
The drawdown facility will be available to both government and non-government subscribers under NPS. Subscribers will have the option to receive payouts on a monthly, quarterly or annual basis. The payout period can continue up to the age of 85 years or according to the choice exercised by the subscriber at the time of exit from the pension system.
PFRDA said the guidelines will come into effect from a date to be notified later, after the necessary system capabilities and operational framework are put in place.
The circular was issued under the powers conferred by Section 14 of the PFRDA Act, 2013.
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