NPS Exit and Withdrawal Rules 2021: The Pension Fund Regulatory and Development Authority has notified several new amendments to National Pension System (NPS) exit and withdrawal rules
NPS Exit and Withdrawal Rules 2021: The Pension Fund Regulatory and Development Authority has notified several new amendments to National Pension System (NPS) exit and withdrawal rules. Named ‘Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2021’, the new regulations have changed several rules regarding exit and withdrawals from the NPS. Now a subscriber can withdraw up to Rs 5 lakh from the permanent retirement account without buying a pension plan.
Take a look at some of the top changes:
Full withdrawal up to Rs 5 lakh
If the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than Rs 5 lakh, or a limit as specified by the Authority, the subscriber will have the option to withdraw the entire accumulated pension wealth without purchasing annuity. After the exercise of this option, the right of such subscriber to receive any pension or other amount under the NPS, or from the government or employer, will extinguish.
Subscription beyond 60 years
If the subscriber wants to continue in the NPS and contribute to his retirement account beyond the age of 60 years or the age of superannuation, he or she can do so by giving in writing or in such form as may be specified, and up to which he would like to contribute to his individual pension account but not exceeding 70 years of age.
This option needs to be exercised at least 15 days prior to the age of attaining 60 years of age of superannuation, as the case may. However, in such cases, individual pension account/ Permanent Retirement Account will be shifted from the Government sector to All citizens including the corporate sector and the expenses, maintenance charges and fee payable under the NPS in respect of the said individual pension account/Permanent Retirement Account will continue to remain applicable.
Extension on account of minimum age
If the accumulated pension wealth of the subscriber is more than Rs 2.5 lakh or a limit to be specified by the Authority for the purpose, but the age of the subscriber is less than the minimum age required for purchasing any annuity, such subscriber will continue to be subscribed to the NPS, until he or she attains the age of eligibility for purchase of any annuity.
However, in such cases, if the accumulated pension wealth of the subscriber is equal to or less than Rs 2.5 lakh, such subscriber will have the option to withdraw the entire accumulated pension wealth without purchasing any annuity.
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If the subscriber attains the age of 60 years or superannuates in accordance with the service rules applicable to such subscriber, at least 40 per cent out of the accumulated pension wealth of such subscriber shall be mandatorily utilised for purchase of annuity providing for a monthly or any other
periodical pension and the balance of the accumulated pension wealth, after such utilization, will be
paid to the subscriber in lump sum.
The subscriber will have the option to defer the purchase of annuity for a maximum period of three years, from the date of attainment of 60 years of age or the age of superannuation, as the case may be. However, for this, the subscriber will have to intimate his or her intention to do so in writing in the specified form at least 15 days before the attainment of age of 60 years or the age of superannuation, as the case may be, to the National Pension System Trust or any intermediary or other entity authorized by the Authority for this purpose.
It will be a prior condition to opt for such deferment of annuity purchase, that in case if the death of the subscriber occurs before such due date of purchase of an annuity after the deferment, then the entire accumulated pension wealth of the subscriber will be paid to the nominee(s) or legal heir(s), as the case may be, of such subscriber.