Pension Fund Regulatory and Development Authority (PFRDA) recently announced changes to simplify and improve the operational issues in the National Pension System (NPS).
Pension Fund Regulatory and Development Authority (PFRDA) recently announced changes to simplify and improve the operational issues in the National Pension System (NPS). This time the government-run body has made changes to the NPS withdrawal rules. Currently, the withdrawal limit is 25 percent and can be made for various purposes, which include critical illness, marriage of children and for the purchase/construction of a house. But now under the new rules, PFRDA has allowed NPS subscribers to withdraw pension fund for reasons which include higher education and investment in new business. The National Pension System is a government-run pension plan.
Here are top 5 NPS withdrawal rule changes:
1- NPS withdrawal is allowed after three years of subscription. Subscribers are allowed to withdraw fund not more than 25 percent of the contributions made by the person.
2- Partial withdrawal will now be allowed to NPS subscribers who wish to improve their employability or acquire new skills by pursuing higher education/acquiring professional and technical qualifications.
3- Apart from this, NPS subscribers who wish to set up a new business or acquire a new business will also be allowed to make partial withdrawals from their contributions.
4- The cap on equity investment has been increased to 75 percent from the current 50 percent under active choice for Private Sector. However, this comes with a clause of tapering of the equity allocation after the age of 50 years.
5- A subscriber of the National Pension System is allowed to withdraw the fund a maximum of three times during the entire tenure of subscription under the NPS. The request for withdrawal shall be submitted by the subscriber to the central record keeping agency or the NPS trust for processing through the nodal office.