NPS Retirement Income Scheme and drawdown, citizen guide 2026
Under the PFRDA circular dated 15 May 2026, you can now keep your NPS corpus invested at exit and draw a regular monthly, quarterly or annual payout yourself, instead of being pushed into a full annuity or a one-time lump sum. You must still buy the minimum annuity for the prescribed portion.
If you are short on time, jump to the comparison tables below to see how the new Retirement Income Scheme stacks up against a full annuity and a lump sum, and how the two payout methods differ.
Quick answer: The Retirement Income Scheme, or RIS, lets you leave your withdrawable NPS corpus invested and take a steady payout. You choose monthly, quarterly or annual, and you pick one of two methods, SPR or SUR. You still annuitise the minimum prescribed portion for lifelong pension.
What the Retirement Income Scheme is
The Retirement Income Scheme is a drawdown facility introduced by the PFRDA circular dated 15 May 2026. It lets a retiring NPS subscriber keep the withdrawable part of the corpus invested and self-draw a regular income. It is an alternative to taking that part as a single lump sum.
At-a-glance eligibility
- You are an NPS subscriber reaching exit and choosing how to take your corpus.
- RIS and drawdown apply only to the withdrawable portion of your corpus.
- You must still use the minimum prescribed portion, 20% or 40% depending on your category, to buy an annuity for lifelong pension.
- You can set your payout frequency as monthly, quarterly or annual.
- You pick one of two drawdown methods, SPR or SUR, described below.
Your three options at exit, compared
This table contrasts the three routes for the withdrawable portion of your corpus. Note that the mandatory annuity sits outside this choice and applies in every case.
| Option | How you get the money | Stays invested? | Best when |
|---|---|---|---|
| Full annuity | You hand the corpus to an insurer for a fixed lifelong pension | No, the insurer holds it | You want certainty and zero management |
| Lump sum | You take the withdrawable portion as one cash payout | No | You need a large amount at once |
| RIS and drawdown | You keep it in NPS and self-draw monthly, quarterly or annual | Yes, in NPS | You want regular income plus market growth |
SPR vs SUR, the two drawdown methods
Once you choose RIS, you select how each payout is calculated.
| Feature | Systematic Payout Rate, SPR | Systematic Unit Redemption, SUR |
|---|---|---|
| What is fixed | A payout percentage set by your age and remaining drawdown period | A fixed number of units redeemed each period |
| How it changes | The percentage rises each year, so the corpus is used up by about age 85 | The unit count stays equal each period |
| Payout amount | Varies with corpus value and the rising rate | Varies with the unit value at each redemption |
| Suits you if | You want the corpus drawn down on a planned timeline | You prefer a steady, predictable unit-based withdrawal |
Step-by-step: how to set up your drawdown
- Confirm your annuity share. Set aside the minimum prescribed portion, 20% or 40% depending on your category, to buy an annuity for lifelong pension. RIS applies only to what is left.
- Choose RIS for the withdrawable portion. At exit, opt to keep this portion invested in NPS under the Retirement Income Scheme instead of taking a lump sum.
- Pick your method. Select Systematic Payout Rate, SPR, or Systematic Unit Redemption, SUR, based on the table above.
- Set your frequency. Choose monthly, quarterly or annual payouts to match your spending pattern.
- Review periodically. Track how your remaining corpus moves and adjust within the rules the scheme allows.
For background on the older exit split, see the related guides below.
Common mistakes to avoid
- Assuming RIS replaces the annuity. It does not. The mandatory annuitisation still applies to the 20% or 40% prescribed portion.
- Confusing SPR and SUR. SPR fixes a rising payout percentage, SUR fixes the number of units redeemed. They behave differently as markets move.
- Picking a frequency that strains cash flow. An annual payout means waiting a year between credits. Choose monthly if you rely on the income for daily expenses.
- Treating the corpus as untouched savings. Under SPR the corpus is designed to be drawn down by about age 85, so plan for that horizon.
Real-life example
Anjali Verma, age 60, Dehradun district. At exit her NPS corpus is split per the rules. She sets aside the minimum prescribed portion, 40% in her category, to buy a lifelong annuity. For the remaining withdrawable portion she chooses RIS instead of a lump sum.
She picks the Systematic Payout Rate method and a monthly frequency, so a payout percentage set by her age and remaining drawdown period is credited each month, rising each year so the corpus is used up by about age 85. All rupee amounts in her plan are illustrative only and depend on her actual corpus and market value. The takeaway: she keeps her money invested and still receives a regular monthly income.
Frequently asked questions
Can I avoid buying an annuity entirely with RIS?
No. The mandatory annuitisation still applies. You must use the minimum prescribed portion, 20% or 40% depending on your category, to buy an annuity for lifelong pension. RIS and drawdown apply only to the withdrawable portion of your corpus.
What is the difference between SPR and SUR?
Under Systematic Payout Rate, SPR, a payout percentage is set by your age and remaining drawdown period and rises each year, so the corpus is used up by about age 85. Under Systematic Unit Redemption, SUR, an equal number of units is redeemed each period instead.
How often can I receive the payout?
You can choose monthly, quarterly or annual payouts. Pick the frequency that matches how you spend. Monthly suits retirees who rely on the income for routine expenses, while annual may suit those with other income sources.
Which rule introduced the Retirement Income Scheme?
The Retirement Income Scheme and drawdown options were introduced by the PFRDA circular dated 15 May 2026, built on amendments to the PFRDA, Exits and Withdrawals under NPS, Regulations, 2025.
Does my money stay invested under RIS?
Yes. That is the core benefit. Instead of taking a lump sum, you keep the withdrawable portion invested in NPS and draw a regular income from it. The mandatory annuity portion is separate and goes to an insurer.
What to do in the next 30 minutes
- Check which category you fall in and whether your minimum annuity share is 20% or 40%.
- Estimate your withdrawable portion after setting aside the annuity share.
- Decide whether a planned drawdown under SPR or steady unit redemption under SUR fits your needs.
- Note your preferred payout frequency: monthly, quarterly or annual.
- If your NPS provider or PFRDA has not explained your options, file an RTI using the AI RTI Drafter to ask the NPS Trust or PFRDA for the applicable terms.
Sources
- PFRDA circular dated 15 May 2026, Introduction of Retirement Income Schemes, RIS, and Drawdown options under NPS.
- PFRDA, Exits and Withdrawals under NPS, Regulations, 2025, as amended.
- The RTI Playbook for filing and escalating RTI requests.
Related on RTI Wiki
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