PFRDA Constitutes High-Level Committee to Enable Assured Payouts under National Pension System

The initiative is aligned with the provisions of the PFRDA Act and seeks to strengthen the security and predictability of retirement income for NPS subscribers.

The Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level committee to formulate guidelines and regulations for establishing a framework for assured payouts under the National Pension System (NPS). The initiative is aligned with the provisions of the PFRDA Act and seeks to strengthen the security and predictability of retirement income for NPS subscribers.

This step represents a significant policy intervention toward advancing the national vision of Viksit Bharat 2047, with a focus on ensuring financial independence, stability, and dignity for citizens in their post-retirement years.

Committee Leadership and Composition

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).

Key features of the committee include:

• A 15-member panel comprising experts from law, actuarial science, finance, insurance, capital markets, and academia

• A multidisciplinary structure to ensure balanced regulatory, market, and consumer perspectives

• Provision to invite external experts and intermediaries as special invitees for wider consultation and feedback

Standing Advisory Role on Structured Pension Payouts

The committee has been established as a standing advisory committee on structured pension payouts, reflecting PFRDA’s intent to create a long-term, sustainable regulatory framework rather than a one-time policy intervention.

Key Objectives and Terms of Reference

The committee’s mandate covers the entire lifecycle of retirement payouts under NPS, with a focus on both subscriber protection and market viability. Its core objectives include:

• Framework DevelopmentFormulating regulations for assured payout products, including examination of pension schemes proposed in the PFRDA consultation paper dated September 30, 2025.

• Seamless Transition from Accumulation to Payout PhaseDesigning an end-to-end framework that ensures a smooth transition for subscribers moving from wealth accumulation to the decumulation (payout) stage.

• Market-Based and Legally Enforceable AssuranceDeliberating on concepts such as novation and settlement to enable legally enforceable, market-based guarantees for assured payouts.

• Operational and Product DesignDefining key operational parameters such as:

  • Lock-in periods

  • Withdrawal limits

  • Pricing methodologies

  • Fee and cost structures for service providers

• Risk Management and Legal OversightEstablishing robust safeguards, including:

  • Capital and solvency requirements for providers

  • Examination of tax implications for payout options that allow subscribers to remain within the NPS architecture

• Consumer Protection and TransparencyDeveloping standardized disclosure norms to:

  • Prevent mis-selling

  • Clearly communicate the nature and limits of assurance

  • Align subscriber expectations with market-based guarantees

Strengthening Retirement Security under NPS

The constitution of this high-level committee marks an important step in the evolution of the NPS from a predominantly market-linked retirement product toward a more predictable and secure pension framework. By exploring assured payout options within a regulated and transparent structure, PFRDA aims to balance subscriber protection with financial sustainability.

Once implemented, the committee’s recommendations are expected to enhance confidence in the NPS, encourage long-term participation, and reinforce India’s broader objective of building a resilient and inclusive retirement system in line with Viksit Bharat 2047.