NPS Retirement Income Scheme: PFRDA Drawdown Rules Explained
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- PFRDA's latest NPS overhaul lets subscribers withdraw up to 80% of the accumulated corpus as lumpsum at exit, with the remaining corpus drawn down through the new Retirement Income Scheme (RIS) via monthly, quarterly, or annual payouts.
- RIS offers two drawdown options for the decumulation phase — Systematic Payout Rate (SPR, the default) and Systematic Unit Redemption (SUR) — available to both government and non-government subscribers, with payouts continuing until age 85 or a subscriber-chosen end date.
- RIS Steady, the currently available variant, invests the drawdown corpus in equity, corporate bonds, and government securities, starting at 35% E / 10% C / 55% G at age 60, with equity dropping 2 percentage points each year until age 70 and 1 point thereafter until it floors at 10% from age 75.
- Under SUR, an equal number of units are redeemed over the chosen drawdown period — the source illustrates this with 800,000 units spread across 300 monthly payouts, working out to 2,666.67 units redeemed each month at the prevailing NAV.
- Under SPR, payouts are reset every birthday using a rate calibrated to the subscriber's current age and chosen drawdown end age, with the corpus rebalanced annually based on market value.
- PFRDA's payout horizon of 85 is calibrated against India's current life expectancy of roughly 72 years; subscribers who outlive 85 will need to arrange alternative income sources once the drawdown corpus is exhausted.
Why it matters: Retiring NPS subscribers gain two structured alternatives to buying an annuity, with the SUR option offering transparent unit-level math and SPR giving age-based payout flexibility — but the 25-year age-85 cap leaves anyone living past it exposed, a real risk given India's 72-year life expectancy already sits within the scheme's window.
