NPS Rule Changes: Why Mutual Funds May Not Lose Long-Term Investors

• NPS rules updated for flexibility: extended age to 85, removed 5-year lock-in, easier pre-retirement access.
• New withdrawal norms: exit after 15 years/age 60; full lump sum for corpus up to ₹8 lakh.
• Corpus > ₹12 lakh: 80% lump sum (was 60%), 20% annuity (was 40%), increasing liquidity.
• Mrin Agarwal states MFs offer superior liquidity/flexibility; NPS lock-in enforces discipline.
• Tax treatment largely unchanged: 60% tax-free, additional 20% taxable, annuity income taxable.

Why It Matters: NPS changes boost flexibility but MFs' liquidity and control will likely retain long-term investors.