The new Retirement Income Scheme (RIS) introduced by the Pension Fund Regulatory and Development Authority under the National Pension System is a major reform in post-retirement pension withdrawals in India. What is PFRDA RIS Scheme? The Retirement Income Scheme (RIS) is a post-retirement payout framework launched by PFRDA on 15 May 2026. It allows NPS subscribers to receive periodic payouts from their retirement corpus while the remaining money continues to stay invested and potentially grow. This scheme is designed to: Improve predictable retirement cash flow Extend longevity of retirement corpus Reduce dependence on traditional annuities Provide flexibility after retirement Key Features of RIS Flexible Drawdown Options - Subscribers can withdraw pension money gradually instead of taking a lump sum. Systematic Payout Rate (SPR) - Fixed payout percentage periodically (Default option) Systematic Unit Redemption (SUR) - Withdrawal based on equal unit redemption similar to SWP in mutual funds Periodic Income Choices - Subscribers can choose payout frequency Monthly, Quarterly, Annual. The payout can continue up to age 85. Corpus Continues to Grow - Unlike traditional annuity products where money gets locked, RIS keeps the remaining corpus invested under NPS pension funds. This helps: Beat inflation Continue market-linked growth Generate sustainable retirement income Mandatory Annuity Still Applies - RIS does NOT remove mandatory annuity rules. Current requirement: Government subscribers → minimum 40% annuity Some private/voluntary subscribers → minimum 20% annuity The remaining portion can be used under RIS drawdown. How RIS Works Example: Suppose your retirement corpus = ₹1 crore Mandatory annuity purchase (20%) - ₹20 lakh Remaining corpus eligible for RIS - ₹80 lakh The ₹80 lakh can: stay invested generate returns provide periodic withdrawals This works somewhat like a pension SWP (Systematic Withdrawal Plan). RIS Steady Lifecycle Model PFRDA is also introducing a lifecycle allocation strategy called “RIS Steady”. Indicative structure: Around 35% equity at age 60 Equity gradually reduces till age 75 Around 10% equity maintained thereafter Purpose: Reduce volatility with age Preserve retirement corpus Maintain growth potential Benefits of RIS Advantages Better retirement income planning Flexibility in withdrawals Inflation protection potential Market-linked growth Avoids locking entire money into annuity Better liquidity Risks Market volatility risk remains Pension amount is not guaranteed Poor withdrawal planning may exhaust corpus earlier Who Can Use RIS? Eligible subscribers : Government NPS subscribers Non-Government subscribers Subscribers opting for phased withdrawal after retirement Subscribers can also continue with existing pension fund managers and switch pension funds once every two financial years. Why This Reform is Important Earlier NPS retirees mainly had two choices: Lump sum withdrawal Buy annuity with limited flexibility RIS introduces a middle path: regular income investment growth flexible withdrawals This makes NPS closer to global retirement income systems that use systematic withdrawal approaches rather than only annuity-based pension models. Source : PFRDA RIS Circular