According to the Pension Fund Regulatory and Development Authority (PFRDA), Indians moving abroad do not necessarily have to exit the National Pension System. As reported by Mint, NRIs and Overseas Citizens of India can subscribe to NPS, subject to applicable rules. The pension regulator describes NPS as portable across employment and geographic locations, meaning an Indian who moves overseas and becomes an NRI can continue with the NPS Tier I account rather than automatically closing it. The system is designed as a voluntary, defined-contribution retirement savings framework that helps subscribers build a retirement corpus through market-linked investments while retaining portability across employers and locations.
For NRI subscribers, PFRDA requires proof of an NRE or NRO bank account as part of the documentation, according to the regulator's guidelines. The same requirement applies to OCIs. As reported by Mint, PFRDA's rules allow subscribers to contribute to NPS through available contribution channels, with contributions invested according to the pension fund and asset allocation selected by the subscriber and recorded with the Central Recordkeeping Agency. The NPS operates as a two-tier account structure where Tier I serves as the core retirement account with restricted withdrawals, while Tier II provides an optional savings account with more liquidity and no lock-in period.
There is an important distinction between NPS Tier I and Tier II for NRIs. According to PFRDA, NRIs and OCIs with Tier I accounts are not permitted to activate a Tier II account. The regulator's FAQ similarly lists NRIs and OCIs as ineligible for Tier II, as reported by Mint. PFRDA had clarified this position when it permitted OCIs to enroll in NPS, stating in its 2019 circular that the NPS Tier II option would not be available to either NRI or OCI subscribers. The Tier II account requires an active Tier I account and has a ₹1,000 minimum balance to keep the account active, with no mandatory annual contribution requirement.
The investment framework for NPS allows subscribers to choose a pension fund and asset allocation. As reported by Mint, NPS contributions can be invested across asset classes such as equity, corporate bonds and government securities, subject to applicable investment guidelines. Under Active Choice, subscribers decide how their money is allocated among available asset classes, with equity allocation going up to 75% under common schemes and permitted allocation to corporate bonds and government securities up to 100%, subject to overall allocation limits. The system combines long-term savings with flexible account options, investment choices and phased withdrawal rules.
For NRIs, moving abroad does not by itself mean that the NPS corpus has to be withdrawn. According to PFRDA, the key change is that the subscriber's status and banking arrangements have to comply with rules applicable to non-residents. As reported by Mint, subscribers can change their pension fund once in a financial year and their investment choice four times in a financial year. However, if an NPS subscriber renounces Indian citizenship and does not hold an OCI card, different rules apply, with PFRDA issuing a separate circular in April 2025 covering the closure of such NPS accounts and settlement of accumulated corpus.
