New Pension Rules 2026: New Retirement Scheme For NPS; How To Withdraw 100% Corpus After 60 Years Of Age?

In major good news, the Pension Fund Regulatory and Development Authority (PFRDA) introduced a new retirement income scheme (RIS) and drawdown facilities for subscribers of the National Pension System (NPS) accounts. The new RIS scheme brings more flexibility to pensioners in withdrawing their retirement corpus. The benefit is applicable up to 85 years of age and would depend upon the choices of the NPS subscribers.

Retirement Income Scheme (RIS)

This new scheme is aimed to provide subscribers with more flexible periodic payout options during their decumulation phase while continuing to support corpus appreciation through the Retirement Income Schemes.

As per the circular of PFRDA, under RIS, NPS subscribers are offered "flexibility to select a phased withdrawal of their designated pension corpus through any drawdown option."

Consequently, PFRDA highlights that these withdrawals will have no impact on the mandatory annuitization requirement of 20% or 40% of the corpus, as the case may be, thus ensuring that the minimum statutory requirement for a life-long pension remains intact.

Under the drawdown options, NPS account holders can receive periodic payouts, i.e. monthly, quarterly, half-yearly and annually. The payouts can be availed till the age of 85 years; however, based on the choice exercised by the subscriber at the time of their exit from NPS.

Both government and non-government NPS subscribers are eligible for the RIS scheme.

Retirement Income Schemes

Following this, PFRDA stated that the RIS Steady scheme is specially designed for periodic payouts depending upon the age bracket. This will employ a continuously declining and annual glide path, which reduces equity exposure to 10% by the time the pensioner reaches 75 years of age from 35% equity exposure at 60 years.

Age-bracket wise Asset Class Distribution under RIS Steady

Upto 60 Years of Age: The NPS account will have 35% exposure of equity, 10% exposure of corporate bonds and 55% of government securities.

After 60 years of age limit, the exposure of equity will start to decline, while the exposure in corporate bonds and government securities will start to rise each year.

For instance, at the of 70 years, the equity exposure will reach to 15%, while corporate bonds and government securities exposure will rise to 20% and 65%.

However, corporate bonds exposure will remain 20% for another five years till the subscriber hits 75 years of age. After that, the corporate bond exposure will slide as, and eventually more of the corpus will be in government securities.

By the time NPS accountholder reaches 80 years of age and above, the equity exposure will fall to 10% and corporate bond exposure will be 15%. But exposure in government securities will become 75%.

Age Bracket	Asset Class E	Asset Class C	Asset Class G
Up to 60 years	35%	10%	55%
61 years	33%	11%	56%
62 years	31%	12%	57%
63 years	29%	13%	58%
64 years	27%	14%	59%
65 years	25%	15%	60%
66 years	23%	16%	61%
67 years	21%	17%	62%
68 years	19%	18%	63%
69 years	17%	19%	64%
70 years	15%	20%	65%
71 years	14%	20%	66%
72 years	13%	20%	67%
73 years	12%	20%	68%
74 years	11%	20%	69%
75 years	10%	20%	70%
76 years	10%	19%	71%
77 years	10%	18%	72%
78 years	10%	17%	73%
79 years	10%	16%	74%
80 years and above	10%	15%	75%

NPS Drawdown Options:

According to PFRDA, the subscribers will receive periodic payouts from the lumpsum portion of their accumulated pension wealth through the following drawdown options. The choice of the drawdown option will be made by the subscriber at the time of closure of a pension account after which fresh contributions will stop.

So the subsribers may have to opt for one of the two options. These are:

1. Systematic Payout Rate (SPR) (Default)

2. Systematic Unit Redemption- SUR-Equal Units

If you do not choose either of the options, your benefits will automatically fall under the defaulted option, SPR.

Calculation of Systematic Payout Rate (SPR)

The Systematic Payouts (SP) shall be a factor of the Systematic Payout Rate applicable at a certain "Current Age" under the SPR option. The Systematic Payout Rate shall be dependent on the Drawdown End Age and the Current Age of the subscriber.

SPR = 1 ÷ Drawdown End Age - Current Age

Example at age 60: 1 ÷ (85-60) = 4% of corpus withdrawn annually

Example at age 65: 1 ÷ (85-70) = 5% of corpus withdrawn annually

Example at age 70: 1 ÷ (85-70) = 6.67% of corpus withdrawn annually

Example at age of 75: 1 ÷ (85-75) = 10% of the corpus can be withdrawn annually.

Example at of 84: 1 ÷ (85-84) = 100% corpus can be withdrawn annually.

Age	Payout Rate
60	4.00%
61	4.17%
62	4.35%
63	4.55%
64	4.76%
65	5.00%
66	5.26%
67	5.56%
68	5.88%
69	6.25%
70	6.67%
71	7.14%
72	7.69%
73	8.33%
74	9.09%
75	10.00%
76	11.11%
77	12.50%
78	14.29%
79	16.67%
80	20.00%
81	25.00%
82	33.33%
83	50.00%
84	100.00%

NPS Systematic Unit Redemption (SUR):

Under this method, the total unit balance is liquidated in equal instalments over the selected drawdown period. The total number of units at the start of drawdown are divided into equal number of units to be redeemed at each payout frequency.

Number of units period = Total number of units at start ÷ Drawdown Period x Payout Frequency

For example:

Corpus: Rs 80 Lakh

NAV at the time of opting drawdown: 10.000

Units at the time of opting drawdown: 8,00,000.0000

Age of exit: 60 years

Drawdown Period: 25 years

Payout frequency: Monthly. This translates to 12 months per year.

Applying the formula would lead to 2666.67 units per month = 8,00,000 ÷ 25 x 12

NPS Retirement Income Scheme Eligibility & Guidelines

Parameter	Details
Eligibility	Subscribers of Government and Non-Government Subscribers (NGS) under NPS, who wish to receive systematic payouts from their designated pension corpus, up to maximum age of 85 years.
Options for Drawdown	i. Subscribers opting for the drawdown options will also have the option of continuing with their existing pension fund.ii. The subscriber shall have the option to switch their Pension Fund once in every two financial years.
Treatment of Corpus in the Event of Demise	i. If a subscriber using the drawdown facility passes away during the payout phase, the remaining balance in their account, after accounting for any scheduled payments already made, will be paid in accordance with the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015, as amended from time to time.
Redemption Method	The units from each asset class shall be redeemed for amount withdrawal in proportion to wealth in respective asset class.
Payout frequency	i. Subscribers may elect to receive periodic payouts on a monthly, quarterly or annual basis. ii. Upon the successful processing of a drawdown request, periodic payouts shall be initiated from the following month. iii. For subscribers opting for the Systematic Payout Rate (SPR), the payout rate and the resulting payout amount shall be reset annually. This reset will occur on the subscriber's date of birth. based on the prevailing market value of the drawdown corpus. iv. The asset rebalancing as per the age brackets, would also occur as per subscriber's date of birth, based on the prevailing market value of the drawdown corpus.
Charges	The charges shall be governed as per existing framework applicable to such schemes.