India’s Pension Fund Regulatory and Development Authority (PFRDA) is planning to introduce three new pension schemes under the National Pension System (NPS).
These new options aim to give subscribers more flexibility, steady post-retirement income, and partial assurance of benefits — catering to different financial needs and risk preferences.
Non-Assured Flexible Decumulation Scheme
This scheme will let retirees split their pension corpus — keeping part of it invested in market-linked assets for potential growth while converting the rest into a fixed annuity for guaranteed income.
It will also include a Step-Up Systematic Withdrawal Plan (SWP), which gradually increases monthly payouts over time.
The idea is to balance steady income with growth opportunities, offering both security and flexibility.
Assured Benefit Scheme
For those who prefer stability over risk, this plan guarantees a fixed pension amount that rises each year with inflation.
The payout will be linked to the Consumer Price Index for Industrial Workers (CPI-IW) — ensuring retirees maintain their purchasing power even as living costs increase.
Assured Pension Credit Scheme
Under this proposed plan, subscribers will earn “pension credits” during their working years.
Each credit will translate to a pre-defined monthly pension after retirement.
This model brings simplicity and predictability, moving closer to a defined benefit structure where retirees know exactly what to expect.
Why These New Plans Matter
More Flexibility: Subscribers can choose plans that suit their risk level — from growth-focused to guaranteed-income options.
Predictable Returns: The assured features help retirees plan better with clearer income expectations.
Inflation Protection: The CPI-linked increase ensures pensions grow with living costs.
Balanced Growth: Market-linked options help protect savings from inflation while offering higher long-term returns.
What Happens Next
PFRDA has released a consultation paper titled “Enhancing the National Pension System: Proposals for Flexible, Assured, and Predictable Pension Schemes.”
Public feedback is open until October 31 for subscribers, financial experts, and pension funds.
After reviewing suggestions, PFRDA is expected to finalize the framework and seek Finance Ministry approval before implementation.
If approved, these new pension options could bring a major shift in India’s retirement planning, combining security, flexibility, and growth — helping retirees enjoy a more stable and sustainable income in their golden years.
