New Delhi: Changes are being made in the rules to give relief to NPS subscribers in withdrawal. PFRDA is going to bring the option of periodic withdrawal instead of lump sum withdrawal.
Pension Fund Regulatory and Development Authority (PFRDA) chairman Deepak Mohanty said that National Pension System (NPS) subscribers are expected to get the option of Systematic Lumpsum Withdrawal (SLW) by the end of this quarter. Systematic lumpsum withdrawal feature will allow NPS subscribers to opt for periodic withdrawals on monthly, quarterly, half-yearly or yearly basis till the age of 75 years.
Current rules for NPS withdrawal
At present, an NPS subscriber can withdraw up to 60 per cent of the retirement corpus as a lump sum when he turns 60. The remaining 40 percent of the corpus essentially goes into buying an annuity. NPS subscribers also have the option to defer the lump sum withdrawal till the age of 75 years.
NPS investors also get the option of phased withdrawals annually while postponing the lump sum withdrawal. Under this, the NPS subscriber can make partial withdrawals on an annual basis, but he has to submit an application every year.
NPS subscribers can opt for period pension
Pension fund regulator is now going to give NPS subscribers the option of withdrawal on monthly, quarterly, half-yearly or yearly basis till the age of 75 years instead of not allowing NPS subscribers to withdraw 60 per cent of the corpus Is. Despite this withdrawal option, the remaining NPS corpus will continue to be invested and returns will continue to accrue till the corpus is fully withdrawn.
Systematic withdrawal facility for Tier-I and Tier-II accounts also
Deepak Mohanty, chairman of the Pension Fund Regulatory, told that when NPS subscribers retire at the age of 60, they can take 60 percent in one go. Apart from this, he can choose the Systematic Lumpsum Withdrawal option for the next 15 years. On choosing the Systematic option, the NPS subscriber will continue to receive monthly, quarterly or half-yearly amounts till the age of 75 years. He said that this facility will be provided for both Tier-I and Tier-II accounts. For Tier II accounts, the Systematic Lump Sum Withdrawal option can be initiated before the subscriber turns 60 years old.
