NPS Rules: Great news for private employees! These NPS rules will change, providing significant benefits...

The Pension Fund Regulatory and Development Authority (PFRDA) has made a major change to the National Pension System (NPS). These changes will particularly benefit private sector employees, self-employed individuals, and young people working on digital platforms. While there were previously many requirements and limitations for receiving pensions, the new system will provide greater flexibility and convenience.

Furthermore, from October 1, 2025, non-government NPS subscribers will be able to invest 100% of their entire pension amount in equity-related schemes. Previously, the equity investment limit was 75%, but this new rule will remove this limit. The purpose of this change is to provide subscribers with greater freedom and allow them to better plan their retirement savings based on their age, needs, and risk tolerance.

You can now invest in more than one scheme.
Until now, NPS investors had to choose only one scheme, whether it was a Tier 1 or Tier 2 account. They had to choose between AutoChoice and ActiveChoice and invest the entire amount accordingly. However, with the introduction of the new MSP (Multiple Scheme Framework), subscribers will be able to divide their pension amount across different schemes.

This change will make NPS more flexible.
Previously, the age limit for investing in NPS was 60 years. Deposits could only be made until the age of 60. However, this rule has now been changed. Subscribers can now withdraw their pension funds at the age of 50 or 55 if they wish. However, if someone wishes to continue investing, they can also deposit from the age of 60 to 75.

80% of the funds can now be withdrawn
Until now, NPS employees needed to invest 40% of their deposits in a pension scheme (annuity) at the time of retirement. However, under the new rules, private sector employees will now be required to invest only 20% in pension funds. This means they can now withdraw 80% of their funds in one lump sum upon retirement. However, the 40% requirement remains in effect for government employees.

Partial withdrawals are now allowed up to six times.
Under the old rules, partial withdrawals were only possible three times during the investment period from an NPS account, with each withdrawal amount being higher than the previous one. This limit has now been increased to six times. This will provide investors with easy access to their funds when needed.

New 15-Year Plan Launched.
Until now, NPS has been considered a long-term investment. However, a 15-year plan is being introduced for private sector employees and self-employed individuals. This will also enable those who wish to plan for retirement for a short period of time.

Pension can now be deferred until the age of 85
The maximum age limit for receiving or withdrawing pension from NPS has been increased from 75 to 85. This means that anyone can now defer the start of their pension until the age of 85. This will give older adults the option to grow their capital for a longer period.

Freelancers and digital workers will also benefit.
The government believes that these changes will prove extremely beneficial for young people working on digital platforms, freelancers, and self-employed individuals. Those who previously missed retirement benefits due to not being associated with a company will now be able to plan for a secure future through NPS.

Corporate employees will also receive direct benefits
The new schemes will also benefit corporate employees whose companies contribute to the NPS. Now, contributions from both employers and employees can be combined more easily, strengthening their retirement funds.

Agents will be allowed to charge fees only up to a certain limit.
The circular clearly states that pension funds (PF) operating under the NPS will be allowed to charge a maximum fee of 0.3% of the AUM (total investment). This fee will include the fund management fee (IMF) and distribution fees paid to agents. All fees will be determined and approved by the PFRDA.

Security Remains the Same
Although new investment options are being introduced in the NPS, security rules will remain the same. Investors will be provided with complete information about their returns and risks in a transparent manner, enabling them to make informed decisions. Pension accounts will also be portable, meaning you can easily transfer your account to any pension fund manager.

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