National Pension Scheme (NPS) is a retirement fund where an individual contributes to his retirement account. However, in some cases a subscriber may want to withdraw and exit.
A subscriber can withdraw upto 20 per cent of the sum accumulated till a point of time, wherein he wants to exit before attaining the age of 60. With the balance amount, he has to buy annuity.
The stringent withdrawal rules is largely to encourage subscribers to stay invested and avail benefits during the retirement period of an individual.
How to withdraw the benefits available under NPS?
If the subscriber wants to exit NPS, he has to submit an application along with other documents to the applicable Point of Presence (POP).
Once the POP is authenticated the application and documents will be forwarded to CRA M/s NSDL. Once the documents are received, CRA processes the application and settles the account.
Documents that need to be submitted
Following documents are required to be submitted along with the withdrawal forms in order to settle the claims:
1. Covering Letter from the associated POP to be submitted along with the withdrawal form
2. PRAN Card (Permanent Retirement Account Number) in original
3. Attested copy of Proof of Identity ( Passport, Aadhar Card, PAN Card, Valid Driving License, Voter ID Card etc.)
4. Attested copy of Proof of Address (Passport, Aadhar Card, Valid Driving License, Voter ID Card etc.)
5. Cancelled cheque (containing Subscriber Name, Bank Account Number and IFS Code) or Bank Certificate Containing Name, Bank Account Number and IFSC code, for direct credit or electronic transfer.
Once an individual attains the age of 60, than atleast 40 per cent of the accumulated pension wealth needs to be utilized for purchase of an annuity providing for the monthly pension and the balance will be paid as a lump sum payment.
Where an individual is looking to withdraw before the age of 60, in such cases at least 80 per cent of the accumulated pension amount needs to be utilized for purchase of an annuity and the balance is paid as a lump sum payment.
In case of death, the entire accumulated pension wealth (100%) would be paid to the nominee or legal heir of the subscriber.
The withdrawal amount will be credited to the bank account of the subscriber.
Withdrawal forms will be available on the NSDL-CRA Corporate Website (http://www.npscra.nsdl.co.in).
Subscriber can also send an email to "firstname.lastname@example.org" or "email@example.com" to get the Withdrawal forms in their e-mail ID.