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PFRDA forms a 15-member committee led by Dr M S Sahoo to develop assured payout options under NPS, aiming for secure retirement like APY and EPF.
NPS explained: How assured pension payouts may work
Pension Fund Regulatory and Development Authority (PFRDA) is considering an assured payout option under the National Pension System (NPS) to make it an attractive and effective retirement scheme for subscribers.
NPS is a market-linked investment scheme that offers returns on the basis of market performance. Upon retirement, subscribers can use 40% of the corpus to buy any annuity and 60% can be withdrawn as a lump-sum.
An assured payout means a regular monthly payment after retirement to subscribers like Atal Pension Yojana (APY), Unified Pension Scheme (UPS) and Employee Provident Fund (EPF). This offers financial security.
PFRDA announced the formation of a high-level committee for formulating guidelines and regulations, according Moneycontrol report. Moreover, it has notified Terms of Reference (ToR) for the committee to develop a framework for assured payout under NPS.
Rohitaashv Sinha, Partner, King Stubb & Kasiva, Advocates and Attorneys as quoted by Moneycontrol said the constitution of an expert committee by PFRDA reflects a measured and forward-looking approach. Sinha added that such a framework can meaningfully address longevity risk while maintaining fiscal and market discipline, if structured with clear legal enforceability, prudent solvency norms and transparent disclosures.
PFRDA has set up a 15-member committee to work on the proposed assured payout option under NPS. The committee will be chaired by Dr M S Sahoo, founder of Dr Sahoo Regulatory Chambers and former chairperson of the Insolvency and Bankruptcy Board of India (IBBI). Members include experts from fields such as law, actuarial science, finance, insurance, capital markets and academia.
Key objectives and terms of reference of the NPS assured payout committee include:
Framework development: Drafting rules for assured pension payouts, including options discussed in PFRDA’s consultation paper dated September 30, 2025.
Smooth transition: Ensuring an easy shift for subscribers from the accumulation phase to the pension payout (decumulation) phase.
Market-based assurance: Examining legal and market-linked mechanisms, such as novation and settlement, to provide enforceable payout guarantees.
Operational design: Finalising rules on lock-in periods, withdrawal limits, pricing, and fee structures for service providers.
Risk and legal oversight: Setting capital and solvency norms, and reviewing tax treatment for payouts without exiting the NPS structure.
Consumer protection: Creating standard disclosure norms to avoid mis-selling and clearly explain the nature of assured and market-linked returns to subscribers.
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January 14, 2026, 10:31 IST
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