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The Andhra Pradesh Director of Treasuries and Accounts (DTA) has issued a circular regarding new National Pension System (NPS) withdrawal rules based on the PFRDA (Exit and Withdrawal) Amendment Regulations 2025.
According to the circular memo dated 02 March 2026, the revised withdrawal limits and exit guidelines for government employees under the NPS have come into effect from 01 January 2026.
These rules explain how government employees or their families can withdraw pension wealth during retirement, resignation, death, or compulsory retirement.
AP NPS New Withdrawal Rules 2026 – Key Changes for Government Employees | DTA Circular
NPS Withdrawal Rules After Retirement (Superannuation)
When a government employee retires as per service rules:
- The employee will remain under the National Pension System until the age of 85, unless they choose to exit earlier.
- At least 40% of the accumulated pension wealth must be used to purchase an annuity, which provides a regular monthly pension.
- The remaining amount can be withdrawn as a lump sum or periodic payout.
Withdrawal Limits
If accumulated pension wealth is:
₹8 lakh or less
- The employee can withdraw 100% of the amount as a lump sum.
Between ₹8 lakh and ₹12 lakh
- Up to ₹6 lakh can be withdrawn as a lump sum.
- The remaining amount must be used for annuity or periodic payout.
Above ₹12 lakh
- Up to 60% can be withdrawn as lump sum.
- At least 40% must be used for annuity purchase.
NPS Rules in Case of Resignation / Removal
If a government employee resigns, is removed, or dismissed from service:
- At least 80% of the pension wealth must be used to purchase an annuity.
- The remaining 20% can be withdrawn as lump sum.
If pension wealth is ₹5 lakh or less
- The employee can withdraw 100% of the amount.
NPS Rules in Case of Death of Subscriber
If the government employee dies before retirement:
- 80% of pension wealth must be used to purchase annuity for family members.
- Remaining amount can be withdrawn by nominees or legal heirs.
- If total wealth is ₹8 lakh or less
- Nominees can withdraw 100% lump sum.
Between ₹8 lakh and ₹12 lakh
- Up to ₹6 lakh lump sum withdrawal allowed.
- Remaining amount must be used for annuity or periodic payouts.
Invalidation / Compulsory Retirement
If an employee is discharged due to disability, invalidation, or compulsory retirement, they are allowed to:
- Withdraw the entire accumulated pension wealth as lump sum, or
- Choose systematic periodic withdrawals as approved by PFRDA.
Implementation of New Rules
The revised withdrawal limits under the NPS Exit Guidelines have been implemented in the Protean-CRA system from 01 January 2026, and all treasury officers in Andhra Pradesh have been instructed to follow these guidelines while processing withdrawal claims.
Conclusiow NPS withdrawal rules provide more flexibility for government employees and their families. The changes mainly affect how pension wealth can be withdrawn during retirement, resignation, or death scenarios. Employees under the Andhra Pradesh government NPS scheme should understand these updated guidelines to plan their pension withdrawals effectively.
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