NPS new rules, Pension Fund Regulatory and Development Authority (PFRDA) has made a major change in the rules for pension withdrawal under the National Pension System (NPS). The authority has issued a new rule regarding withdrawal provisions. According to PFRDA, under the new rules, now no one can partially withdraw more than 25 percent of the amount from the NPS account. The new rules will be implemented from 1 February 2024.
According to the new rule issued by the Pension Fund Regulatory and Development Authority, investors investing in NPS will not be allowed to withdraw more than twenty-five percent of the contribution in their individual pension account, excluding the employer’s contribution.
According to the rules issued, for partial withdrawal, subscribers will have to submit a withdrawal request form and self-declaration to the central record-keeping agency. Only after that he can withdraw the money.
When can you withdraw from NPS?
Some rules have been made to withdraw money from NPS. Only on that basis you will be allowed to withdraw money from your pension account.
For children’s education or marriage
to buy a house
In case of medical emergency
In case of disability or disability in case of accident
For the money spent on skill development
To start a startup or business
Other conditions regarding partial withdrawal :
Subscriber must be a member for three years from the time the account is opened.
More than 25 percent cannot be partially withdrawn from this account.
NPS account holders are allowed to make partial withdrawals from the account a maximum of three times only.
At the time of second withdrawal, the maximum amount will be determined only on the basis of the amount deposited by the subscriber after the first withdrawal.
Similarly, the maximum amount for the third withdrawal will be determined based on the amount the subscriber has deposited after the second withdrawal.
Who will benefit from this change?
According to Livemint news, SLW is an attractive option for retirees who want a consistent source of income during their post-retirement years. This can be requested when a subscriber retires and applies for a lump sum NPS (National Pension System) corpus after purchasing an annuity. NPS is a pension program run by the Government of India, which is regulated by PFRDA. An NPS subscriber invests in the capital markets (equities, government securities, corporate bonds and alternative assets) as per his risk appetite to build his retirement fund.