NPS for NRIs: What happens to your account when you move abroad? PFRDA explains

Indians moving abroad do not necessarily have to exit the National Pension System (NPS). According to the Pension Fund Regulatory and Development Authority (PFRDA), non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) can subscribe to NPS, subject to the applicable rules.

PFRDA's current guidelines state that NPS is open to Indian citizens, including NRIs and OCIs. The pension regulator also describes NPS as portable across employment and geographic locations.

This means an Indian who moves overseas and becomes an NRI can continue holding their NPS Tier I account instead of having it automatically closed.

What happens to your NPS account when you move abroad?

According to PFRDA, NRIs and OCIs can hold an NPS Tier I account. For NRI subscribers, PFRDA requires proof of an NRE or NRO bank account as part of the documentation. The same requirement applies to OCIs.

PFRDA's rules also allow subscribers to contribute to NPS through the available contribution channels. Contributions are invested in accordance with the pension fund and asset allocation selected by the subscriber and recorded with the Central Recordkeeping Agency.

However, there is an important distinction between NPS Tier I and Tier II for NRIs.

PFRDA explicitly states that 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.

Therefore, someone moving abroad should not assume that the same Tier I and Tier II options available to a resident subscriber will remain available after becoming an NRI.

PFRDA had also clarified this position when it permitted OCIs to enrol in NPS. In its 2019 circular, the regulator said the NPS Tier II option would not be available to either NRI or OCI subscribers.

How can NRIs invest their NPS money?

The investment framework for NPS allows subscribers to choose a pension fund and asset allocation. PFRDA says NPS contributions can be invested across asset classes such as equity, corporate bonds and government securities, subject to the applicable investment guidelines.

Under Active Choice, subscribers decide how their money is allocated among the available asset classes. PFRDA's current NPS page says that equity allocation can be up to 75% under the common schemes, while the permitted allocation to corporate bonds and government securities can be up to 100%, subject to the overall allocation limit.

Subscribers can also use Auto Choice, under which the allocation across equity, corporate bonds and government securities is determined according to the selected life-cycle strategy and the subscriber's age.

PFRDA also says subscribers can change their pension fund once in a financial year and their investment choice four times in a financial year.

For an NRI, therefore, moving abroad does not by itself mean that the NPS corpus has to be withdrawn. The key change is that the subscriber's status and banking arrangements have to comply with the rules applicable to non-residents.

There is another important situation to consider. If an NPS subscriber renounces Indian citizenship and does not hold an OCI card, the rules are different. PFRDA issued a separate circular in April 2025 covering the closure of such NPS accounts and settlement of the accumulated corpus.

For Indians simply moving abroad while retaining their Indian citizenship, the PFRDA framework therefore allows NPS participation to continue, with the NRE/NRO banking requirements and the restriction on Tier II for NRI/OCI subscribers.