The National Pension System (NPS) landscape has seen a relentless series of reforms in recent months. After major changes to exit and investment norms last year, the latest reform targets the withdrawal phase.Until recently, NPS subscribers retiring at 60 had limited choices for their corpus. While at least 20% of the corpus had to be compulsorily used to purchase an annuity, the remaining 80% could either be withdrawn as a lump sum or accessed gradually through the existing Systematic Lump-sum Withdrawal (SLW) facility, where subscribers decided the amount and timing of withdrawals. Now, the Pension Fund Regulatory and Development Authority (PFRDA) has introduced a third option for this 80% portion: the Retirement Income Scheme (RIS), a structured withdrawal plan with built-in guardrails aimed at helping retirees make their corpus last longer.Phased withdrawal to optimise corpusUnder the ‘RIS Steady’ variant, the scheme offers orderly exit and regular— monthly, quarterly or annual —payouts through two drawdown options: systematic unit redemption (SUR) and systematic payout rate (SPR), with the latter being the default option. More on how SUR and SPR differ later.According to the PFRDA, the purpose is to improve cash flow predictability and corpus longevity, thus minimising the risk of the accumulated funds being exhausted before the end of the drawdown period. The systematic payouts will begin once the accumulation phase ends and continue until age 85.Currently, the only available variant, RIS Steady provides a predefined withdrawal runway in which equity exposure shrinks in line with subscribers’ advancing age.Under RIS Steady, the asset mix is pre-set by age and shifts automatically (see table). At 60, the equity allocation starts at 35% and steps down every year—33% at 61, 25% at 65, 15% at 70, 10% after 75. Government securities, the most conservative asset class, makes the mirror-image move, rising from 55% at 60 to 75% after 80.The annual payout amount under SPR will reset on the subscriber’s birth date, as will asset rebalancing (based on the prevailing market value of the drawdown corpus) in accordance with the subscriber’s age bracket.Subscribers can choose to be invested with their pension fund manager selected during the accumulation phase, with a selection switch being allowed once every two years.You can withdraw the entire residual corpus, if any, under SPR as a lump sum once the drawdown period is over. In the event of the subscriber’s death while the systematic withdrawal is in effect, the lump-sum, minus scheduled payouts, will be handed over to the beneficiaries.Why RIS?Experts say RIS provides retirees with greater flexibility, more stable income, and better management of their retirement savings. “It enables the retirees to systematically withdraw pension wealth while allowing the remaining corpus to stay invested. This helps retirees potentially benefit from continued market participation, manage longevity risk more effectively and create a more customised retirement income stream aligned with their financial needs and life expectancy,” says Vishwajeet Goel, Head, PensionBazaar.As with the auto choice via age-wise life-cycle funds during the accumulation— investment—phase, RIS ensures that retirees need not be concerned about actively managing their lump-sum component. Without a structured plan, many might simply park their corpus in FDs or savings accounts—safe, but inadequate against rising costs and longer lives.“With life expectancy rising, career spans shortening, and living expenses shooting up, it is becoming extremely difficult to manage living expenses for long retirement phases. The regulator wants retirees to create a structured income stream and avoid exhausting retirement savings too early,” says financial adviser Anuj Kesarwani, Founder, Zenith Finserve.RIS provides flexibility to retirees by allowing the remaining corpus to stay invested in market-linked NPS funds such as equity, corporate debt and government bonds, while enabling staggered withdrawals. “This gives the money a chance to grow further during retirement,” says Rajesh Khandagale, SVP – NPS, KFin Technologies.The RIS asset allocation pathway