How your NPS works when you switch jobs or move abroad

The National Pension System (NPS) has emerged as one of the most flexible retirement savings tools in India, thanks to its portability and lifetime account structure. The system is anchored by the Permanent Retirement Account Number (PRAN) — a unique identifier that remains constant throughout an individual’s lifetime.

This means that changing jobs or even relocating abroad does not interrupt your retirement savings journey.

NPS portability across jobs

When an employee changes jobs, the same PRAN can be used with the new employer, provided the organisation participates in the corporate NPS framework. If the new employer does not offer NPS, the individual can continue contributing independently under the individual subscriber category.

“The PRAN stays active forever and is fully transferable. You can continue contributing to your Tier I and Tier II accounts regardless of any change in employment,” says Ajay Kumar Yadav, Group CEO & CIO, Wise Finserv.

Each corporate is associated with one Point of Presence (POP) and one Central Recordkeeping Agency (CRA). When a subscriber changes jobs, the alignment for POP or CRA may change based on the new employer’s selection.

“All the underlying data — KYC, personal, portfolio, and transaction details — are migrated from the current CRA to the new CRA. This migration is free and does not affect the portfolio or NAV,” explains Rajesh Khandagale, Senior Vice President, NPS.

Experts suggest using a job transition to revisit asset allocation across equity, corporate debt, and gilt funds to ensure it remains aligned with income level and risk tolerance.

Moving abroad? Your NPS still works

The NPS framework remains accessible to Non-Resident Indians (NRIs), allowing them to continue investing through NRE or NRO accounts. The contribution and withdrawal rules are largely identical to those for resident Indians.

“NRIs can maintain and continue their contributions even after moving abroad by updating KYC and residency status. They can also claim the same tax benefits as resident investors under Sections 80C and 80CCD(1B), provided they have taxable Indian income,” Yadav adds.

However, those who surrender Indian citizenship are required to close their NPS accounts and withdraw the accumulated corpus.

Tier I and Tier II accounts

NPS offers two accounts:

• Tier I — the primary retirement account, mandatory for all subscribers. Partial withdrawals are permitted under specific conditions such as higher education, marriage, medical emergencies, or house purchase, subject to limits.
• Tier II — a voluntary savings account that offers full flexibility for contributions and withdrawals without any lock-in.

Withdrawals and tax treatment

At the time of retirement, subscribers can withdraw up to 60% of the corpus tax-free, while the remaining 40% must be used to purchase an annuity. For early exits (before age 60), 20% of the corpus can be withdrawn, with 80% annuitised.

“The NPS remains a transparent, low-cost, and disciplined retirement option that stays with you through job changes, career breaks, or even relocation abroad,” says Sachin Jain, Managing Partner, Scripbox.