PFRDA allows loans against pension savings

Partial withdrawal norms for NPS accounts rationalised; annuity mandate at retirement relaxed for smaller balances

- HARSH KUMAR

The Pension Fund Regulatory and Development Authority (PFRDA) has made multiple changes under its exit regulations of the National Pension System (NPS).

It has allowed subscribers to seek financial assistance against their pension savings, as part of the PFRDA (Exits and Withdrawals under the NPS) (Amendment) Regulations, 2025.

Under the revised stipulation, an NPS subscriber may avail financial assistance from a regulated financial institution. The lender is permitted to mark a lien or charge on the individual pension account.

However, such lien or charge will be restricted to up to 25 per cent of the subscriber’s own contribution, in line with the existing limits applicable to partial withdrawals.

Currently, the regulations provide that any assignment, pledge or charge on NPS benefits is void, except in cases explicitly permitted by the NPS Trust.

The proposed amendment relaxes this restriction, enabling limited use of the pension corpus as collateral while ensuring safeguards on withdrawal limits.