Emergency withdrawals under New Pension System may be allowed

Written by Press Trust of India | Mumbai | Updated: Aug 15 2013, 03:50am hrs
Subscribers to National Pension System (NPS) may be allowed withdraw partial funds in emergency situation like health issues, a top PFRDA official said today.

At present, no partial withdrawal is allowed under the voluntary contribution-based pension scheme.

"At this point, they are not allowing any partial withdrawal but there are some requests for withdrawal like during emergency medical conditions and we are looking into it," PFRDA Chairman Yogesh Agarwal told reporters on the sidelines of a CII insurance summit here.

Though any withdrawal would eat into the corpus, yet the regulator is considering the proposal for the benefit of subscribers, he said.

Under the current rules, fund withdrawal is allowed only at the time of retirement.

On the issue of proposal to give option to EPFO employees to join NPS, he said it is an inter-ministerial matter but added that the returns under the pension scheme is one of the best among all financial instruments.

Referring to the Pension Bill, Agarwal said the regulator is hopeful of Parliament passing the proposed legislation.

"Hopefully, it would be passed. The two major parties (Congress and BJP) are on the same page. Whatever the Standing Committee has recommended, has been included into the Bill. Now, I don't think there is any contentious issue," Agarwal said, adding if the Bill is passed, the PFRDA will have the authority to impose penalty without approaching the court.

He said the requirement of capital for the pension industry is lesser than the insurance sector.

The PFRDA Chairman said public sector employees and their private sector counterparts would soon enjoy parity when it comes to subscribing for the NPA and added that a formal notification regarding this would be out soon.

NPS, which has 52 lakh subscribers as of now, is one of the lowest cost pension funds in the country (and also in the world) and is open to every citizen.