NPS exit rules explained: Amount of money you can withdraw and when
Know about corpus slabs, annuity norms, lump sum limits and payout options under the All Citizen Model
 "NPS exit rules explained: Amount of money you can withdraw and when")
The National Pension System (NPS) allows subscribers under the All Citizen Model to withdraw their retirement savings under certain conditions. These rules, notified by the Pension Fund Regulatory and Development Authority (PFRDA), define the timelines for exit, the maximum permissible lump sum, and the mandatory portion required to purchase an annuity.
Here is an explanation of the rules:
Exit on maturity of scheme
A subscriber can opt for normal exit after completing 15 years of subscription or on attaining 60 years of age, whichever is earlier.
At this stage:
Minimum 20 per cent of the accumulated pension wealth (APW) must be used to purchase an annuity, which provides a regular pension.
Up to 80 per cent can be withdrawn as a lump sum.
Subscribers also have the option to defer withdrawal and continue the account up to the age of 85.
Corpus-based rules
The withdrawal structure depends on the size of the retirement corpus:
APW up to Rs 8 lakh: Entire amount can be withdrawn as a lump sum.
APW above Rs 8 lakh and up to Rs 12 lakh: Up to Rs 6 lakh can be taken as lump sum, and the remaining amount must be used for annuity or withdrawn in a phased manner through systematic unit redemption (SUR) over a minimum of six years.
APW above Rs 12 lakh: Up to 80 per cent lump sum and at least 20 per cent annuity apply.
Subscribers can also choose systematic lump sum withdrawal (SLW), which allows staggered payouts instead of taking the full eligible lump sum at once.
Premature exit
If a subscriber exits before completing the vesting period, stricter rules apply:
At least 80 per cent of the corpus must be used to purchase an annuity.
Only up to 20 per cent can be withdrawn as lump sum.
However, if the total corpus is up to Rs 5 lakh, 100 per cent can be withdrawn as lump sum.
There is no minimum lock-in period for premature exit under the All Citizen Model.
Exit on death
In case of the subscriber’s death, the entire accumulated pension wealth is payable to the nominee or legal heir. The nominee may opt for a lump sum withdrawal, annuity purchase, or use systematic withdrawal options.
These rules define how retirement savings under the All Citizen Model can be accessed, balancing liquidity with the requirement of a post-retirement income stream.