PFRDA proposed easier NPS exit norms, subscribers can continue till age 70

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Published: August 17, 2016 6:32:48 PM

In an effort to simplify exit norms under the National Pension System (NPS) the Pension funds Regulatory and Development Authority (PFRDA) has proposed that subscribers can continue up to the 70 years instead of the present stipulation of 60 years or superannuation. However, the subscriber will have give in writing to exercise the extension option not less than fifteen days prior to subscriber attaining the age of sixty years or age or superannuation, as the case may be. The communication has to be made to the National Pension System Trust or any other intermediary or entity authorized by the Authority.

In a set of draft norms circulated for comments PFRDA has however said that no option of deferment of collection of benefits shall be admissible to such a subscriber. (Source: PTI)

In an effort to simplify exit norms under the National Pension System (NPS) the Pension funds Regulatory and Development Authority (PFRDA) has proposed that subscribers can continue up to the 70 years instead of the present stipulation of 60 years or superannuation. However, the subscriber will have give in writing to exercise the extension option not less than fifteen days prior to subscriber attaining the age of sixty years or age or superannuation, as the case may be. The communication has to be made to the National Pension System Trust or any other intermediary or entity authorized by the Authority.

In a set of draft norms circulated for comments PFRDA has however said that no option of deferment of collection of benefits shall be admissible to such a subscriber. Notwithstanding such intimation, the subscriber may exit at any point of time, from the National Pension System by submitting a request in writing to the National Pension System Trust or any intermediary or entity authorised by the Authority for this purpose.

The norms are part of amendment proposed to the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015.
The pension regulator has said that where a subscriber who, upon attaining the age of superannuation as prescribed by the service rules applicable to him or her, retires, then at least forty 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.

The balance of the accumulated pension wealth, after such utilisation, shall be paid to the subscriber in lump sum or he shall have a choice to collect such remaining pension wealth in accordance with the other options specified by PFRDA.

The regulator has proposed that when a subscriber desires to defer the purchase of annuity, he or she shall have the option to do so for a maximum period of three years from the date of attainment of age of superannuation, provided the subscriber intimates his or her intention to do so in writing in the specified form or any other approved mode by the authority at least fifteen days before the attainment of age of superannuation to the Central recordkeeping agency or National Pension System Trust or an intermediary or entity authorized by the Authority for this purpose.

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