New Delhi [India], October 1 : The Pension Fund Regulatory and Development Authority (PFRDA) has released a detailed Consultation Paper titled "Enhancing the National Pension System: Proposals for Flexible, Assured and Predictable Pension Schemes", inviting stakeholders across sectors to provide feedback on proposed reforms aimed at strengthening the National Pension System (NPS).
Dated September 30, 2025, the paper outlines three innovative pension scheme options under the NPS framework designed to offer subscribers greater flexibility, assurance, and predictability in their post-retirement income, as added in a release by the Ministry of Finance.
The first option, Pension Scheme-1 (Non-Assured, Flexible Decumulation), emphasizes wealth maximization by combining a Step-up Systematic Withdrawal Plan (SWP) with an annuity. This hybrid approach allows subscribers to benefit from both planned withdrawals and guaranteed income, offering flexibility in managing retirement funds.
Pension Scheme-2 (Assured Benefit) targets subscribers seeking assured pension payouts. This scheme aims to provide a Target Pension that is periodically adjusted for inflation, based on the Consumer Price Index for Industrial Workers (CPI-IW). This ensures that the pension keeps pace with rising living costs, offering financial security and predictability.
The third option, Pension Scheme-3 (Assured through Pension Credits), introduces the novel concept of "Pension Credits." Each credit represents a fixed monthly pension payout, providing subscribers with a transparent, goal-oriented framework that enhances predictability and engagement in planning their retirement income.
PFRDA has made the consultation paper accessible on its official website under the Research and Publication section and encourages a wide array of stakeholdersincluding current and prospective NPS subscribers, pension funds, industry experts, academicians, and the general publicto review the proposals and provide constructive inputs.
All feedback should be submitted using the Feedback Template included within the consultation paper by October 31, 2025, the Finance Ministry added.
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