The National Pension System (NPS) is a voluntary retirement scheme managed by the Pension Fund Regulatory & Development Authority (PFRDA) for individuals who want to generate a handsome pension after reaching the age of 60. To withdraw from an NPS, a subscriber must submit a withdrawal application form along with the required papers to the relevant POP. The documents will then be validated and sent to CRA M/s NSDL by the POP.
What documents are required in the event of Superannuation and Premature Exit?
- The following documents must be submitted along with the completed Withdrawal form for Superannuation & Pre-mature Exit:
- The Subscriber must fill out and sign the Revenue stamp on the original PRAN card Advance stamped receipt.
- KYC documentation (address and photo-id proof)
- As bank proof, a 'Cancelled Cheque' (with Subscriber's Name, Bank Account Number, and IFS Code) or a 'Bank Certificate' on Bank Letterhead with Subscriber's Name, Bank Account Number, and IFS Code must be submitted. 'Copy of Bank Passbook' can be accepted, but it must include the Subscriber's photograph, name, and IFS Code and be self-attested by the Subscriber.
- If you are eligible for a full withdrawal, fill out the "Request Cum Undertaking"
POP will authorise the Withdrawal request after receiving the required documents.
Where can subscribers obtain the withdrawal forms?
The NSDL-CRA Corporate Website (http://www.npscra.nsdl.co.in) has withdrawal forms available. Subscribers can also request withdrawal forms by sending an email to email@example.com or firstname.lastname@example.org.
When can a Subscriber leave NPS?
According to the PFRDA (Exits and Withdrawals from NPS) Regulations 2015, subscribers can exit NPS in the following circumstances:
After Superannuation - When a subscriber reaches the Superannuation age/reaches the age of 60, he or she must use at least 40% of the accumulated pension corpus to purchase an annuity that provides a regular monthly pension. The remaining funds are available for withdrawal as a lump sum.
Subscribers can take a 100% lump sum withdrawal if their total accumulated pension corpus is less than or equal to Rs. 5 lakh.
Premature Exit - If the Subscriber leaves before reaching the age of superannuation/turning 60, at least 80% of the Subscriber's accumulated pension corpus must be used to purchase an Annuity that provides a regular monthly pension. The remaining funds can be withdrawn as a lump sum. An NPS, on the other hand, can only be withdrawn after 5 years.
The subscriber can withdraw the entire amount if the total corpus is less than or equal to Rs. 2.5 lakh.
Upon the death of the subscriber
The entire accumulated pension corpus (100%) would be paid to the subscriber's nominee/legal heir.
Can I withdraw all of my accumulated pension wealth without annuitization?
NPS is a pension scheme in which you accumulate funds during your working life and receive a pension from the accumulated corpus when you reach the age of 60. To ensure that the Subscriber receives a sufficient pension, the entire pension wealth cannot be withdrawn without annuitisation. As previously stated, a minimum of 40% of the corpus must be used for annuity. However, if the subscriber's accumulated pension wealth is up to Rs.5 lakhs at the time of exit, the entire corpus can be withdrawn.