National Pension System (NPS) Partial Withdrawal Rule: The facility of partial withdrawal from the National Pension System (NPS) account through self-declaration is no longer available to subscribers from the Central Government, State Government and Central Autonomous Bodies.
Through a circular dated December 23, the Pension Fund Regulatory and Development Authority (PFRDA) has now made it mandatory for all Government sector subscribers to submit their partial withdrawal requests through their associated nodal offices.
The PFRDA’s decision comes amid several states deciding to re-implement Old Pension Scheme (OPS). The states have requested the regulator to refund the corpus of their employees.
During the Pandemic, the regulator had allowed Government sector subscribers to make partial withdrawals from NPS accounts through self-declaration.
“PFRDA has issued a circular no: PFRDA/2021/3/SUP-ASP/3 dt.14.01.2021 on partial withdrawals under NPS through self-declaration for the benefit of subscribers as a special dispensation to cope with the Covid pandemic in order to protect the subscribers’ interest and ease the burden of nodal officers including POPs from verification and authorization. The circular also provided for the option of submission of the partial withdrawal requests by the subscribers through their nodal office/POPs as per the prevalent practice,” the regulator noted.
As per the earlier circular, the online requests of the subscribers were directly processed in the CRA system post-Instant Bank Account Verification through penny drop. This didn’t require authorization by the associated nodal officers/POPs. The facility benefited subscribers during the Covid-19 pandemic and immobility caused due to lockdowns in various parts of the country to contain the spread of corona. However, the regulator has withdrawn this facility.
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NPS partial withdrawal: What’s new
“With the abating of the pandemic-related difficulties & relaxation of lockdown restrictions, the issue examined after taking into consideration of the prevalent practices, circumstances and law, it has been decided to make it mandatory for all the Government sector subscribers (Central/ State Govt & Central/State Autonomous Bodies) to submit their requests through their associated nodal offices,” the regulator said in its latest circular.
No change for non-Government subscribers
The regulator said that a partial withdrawal facility through self-declaration with continues to be available to voluntary non-Government subscribers.
“The subscribers belonging to the voluntary segment of the NPS (All citizens and Corporate) may continue to use the process as mentioned in the cited circular,” the regulator said.