'Clear exit rules will encourage NPS participation': Finance Ministry

New Delhi: The finance ministry Friday said the key amendments to the PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015, will provide subscribers greater flexibility, choice and autonomy in investment decisions and aid in managing accumulated pension wealth.

The pension regulator earlier this week had notified the regulations, paving the way for greater flexibility in exit options, enhanced lump-sum withdrawal thresholds, and clearer, structured provisions for nominees and legal heirs, while strengthening transparency across government, non-government and all-citizen NPS models.

In its statement the ministry noted that the amendments, primarily aimed at the non-government sector, also rationalise provisions for the government sector.


"Clear and well-structured exit provisions are expected to encourage entry and sustain participation by balancing subscriber needs and pension objectives across different stages of their life cycle," it said, adding that the amendments reflect evolving subscriber needs and seek to make the NPS more inclusive, responsive and subscriber-friendly, while safeguarding long-term retirement income security.

The new guidelines provide that for subscriber registered under National Pension System as NPS-Lite or Swavalamban subscriber, if the accumulated pension wealth of the subscriber is equal to or less than ₹2 lakh, such subscriber shall have the option to withdraw the entire accumulated pension wealth in lump sum.