New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) has proposed three new pension schemes under the National Pension System (NPS).
These new options are designed to give subscribers more flexibility, a steady retirement income, and partial benefit assurance to meet different financial needs.
Non-Assured Flexible Decumulation Scheme
This plan will let retirees keep part of their pension savings invested in market-linked assets for potential growth while converting the remaining amount into a fixed annuity that guarantees regular income.
It will also include a Step-Up Systematic Withdrawal Plan (SWP) feature, which will gradually increase monthly payouts and ensure a safety net through assured returns.
Assured Benefit Scheme
Aimed at those seeking income stability, this plan will offer a fixed pension amount with inflation protection.
The pension will rise every year based on the Consumer Price Index for Industrial Workers (CPI-IW), helping retirees maintain their purchasing power even as prices go up.
Assured Pension Credit Scheme
In this scheme, subscribers will earn “pension credits” during their working years. Each credit will represent a specific monthly pension amount after retirement.
This simple and transparent design aims to make post-retirement income more predictable and shifts the system closer to a defined benefit structure.
Why These New Pension Options Matter
Flexibility: Pensioners can choose a plan that fits their financial goals — whether growth-oriented, low-risk, or balanced.
Predictability: The inclusion of assured elements will help retirees plan better with clear visibility on their post-retirement income.
Inflation Protection: The CPI-linked increases in the Assured Benefit Scheme will ensure income keeps pace with rising living costs.
Balanced Growth: A mix of market exposure and guaranteed income can protect savings from inflation while improving long-term returns.
PFRDA’s Consultation and Next Steps
The PFRDA has released a consultation paper titled “Enhancing the National Pension System: Proposals for Flexible, Assured, and Predictable Pension Schemes.”
It is open for public feedback from subscribers, pension funds, and financial experts until October 31.
After reviewing the suggestions, the PFRDA will finalize the framework and seek approval from the Finance Ministry before implementing the new schemes.
These proposed plans represent a major step forward in India’s retirement planning system.
By combining flexibility, assurance, and inflation protection, they aim to help India’s growing retired population enjoy a stable and sustainable income without giving up the potential for long-term growth.
