NPS Retirement Income Scheme: How payouts work, what happens to annuity and where corpus is invested

The Retirement Income Scheme allows NPS subscribers to receive regular payouts from the designated portion of their corpus. Check how the payouts will work, what happens to the mandatory annuity portion, and how the corpus will be invested. 

For someone saving through the National Pension System (NPS), retirement planning does not end with building a corpus. Once you retire, you also need a way to turn that accumulated money into a regular income.

On 15 May 2026, the Pension Fund Regulatory and Development Authority (PFRDA) introduced Retirement Income Schemes (RIS) for NPS subscribers. The scheme is designed to help retirees receive regular payouts from the portion of their NPS corpus that is available for phased withdrawals.

Why is this important for NPS subscribers?

Think of your NPS retirement corpus as the money you have built over your working years. At retirement, this money has to be split according to NPS exit rules.

A specified portion, 20% or 40%, depending on the applicable exit rules, has to be used to buy an annuity. An annuity is a product that gives you a regular income or pension after you invest this amount with an annuity provider.

The remaining portion can be used according to the applicable withdrawal rules. The RIS gives subscribers a way to take regular payouts from this portion, rather than treating it simply as a lump-sum withdrawal.

This means an NPS subscriber can have two sources of retirement income: the annuity (pension) income from the mandatory portion and regular RIS payouts from the designated remaining portion of the corpus.

What does the RIS actually offer?

Under RIS, you can choose to receive money from your designated NPS corpus every month, every quarter, or once a year. The payouts can continue until the age of 85 years, or for a shorter period chosen by you when you exit NPS.