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NPS: There has been a big change in the rules related to entry and exit in NPS, check details

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National Pension System

There is good news for those investing in National Pension Scheme (NPS). Pension Fund Regulatory and Development Authority (PFRDA) has made major changes in the rules related to entry in NPS. Also, the exit rules for senior citizens have been simplified.


Let us know what has been said in the new circular of the Pension Fund Regulatory and Development Authority.

Entry limit raised to 70 years

According to the new circular of Pension Fund Regulatory and Development Authority, now the maximum age of joining NPS will be 70 years instead of 65. After this new amendment, people will now be able to enter NPS from the age of 18 to 70 years.

Any Indian and Overseas Citizen of India will also be able to enter in it till the age of 70, with the flexibility to invest in it up to a maximum of 75 years. The Pension Fund Regulatory and Development Authority said, “Subscribers whose NPS account has been closed. All such people can also open a new account as per the new rules.

Equity exposure is different in Active Choice and Auto Choice

PFRDA has said that if a subscriber joins NPS after the age of 65 years and decides to invest under the default auto choice, he will be allowed to invest only up to 15 per cent in shares. For subscribers joining NPS after 65 years of age, the circular states that they will normally be allowed to exit after three years. According to the circular, if one invests under active choice, then their equity exposure will be 50 percent.


PFRDA said that the subscriber will have to use at least 40 percent of the corpus for ‘purchase of annuity’. The balance amount can be withdrawn in a lump sum. If the subscriber’s corpus is Rs 5 lakh or less, he can withdraw the entire added pension in one lump sum. PFRDA said exiting NPS before three years will be treated as ‘premature exit’. In this, the subscriber will have to use at least 80 percent of the corpus for the annuity. If the subscriber wants to exit NPS prematurely and his corpus is less than Rs 2.5 lakh, he can withdraw the entire amount added in one go.

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