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PFRDA: Retired People May Be Able To Withdraw Entire NPS Corpus

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Pensioners who want to use their pension money for personal their personal finance will shortly be able to take their full lifetime contributions out. According to official sources, the Pension Fund Regulatory and Development Authority (PFRDA) is proposing a better alternative for National Pension System (NPS) subscribers, in which they will be able to withdraw their whole pension amount if the corpus is up to Rs 5 lakh. Currently, an NPS subscriber can withdraw the entire balance up to a limit of Rs 2 lakh. Above this threshold, only 60% of the pension fund can be withdrawn, with 40% of contributions being required to be deposited for annuities.

 

PFRDA: Retired People May Be Able To Withdraw Entire NPS Corpus

According to sources, the aim is to raise the threshold to Rs 5 lakh, which will provide higher efficacy to a certain group of subscribers. Furthermore, with a corpus of Rs 5 lakh, the regular pension amount will be much too little to support the subscribers with a sufficient retirement income. According to sources, the regulatory body may allow subscribers to keep a portion of their pension funds for investment in annuities or by pension fund managers themselves. The adjustments are being related to annuity returns, which are now hovering around 5.5 percent. If inflation and income tax on pension accumulation are factored in, the yield on annuity premiums is unfavourable. Subscribers would have more options to maximise the returns on their lifelong investments if the rules were changed.

Meanwhile, the Pension Fund Regulatory and Development Authority (PFRDA) reported on Wednesday that the National Pension System (NPS) and Atal Pension Yojana (APY) had a total of 42.6 million subscribers at the end of the Financial Year 2020-21. Furthermore, as of April 2021, the overall assets under management (AUM) of the NPS and APY rose by 36.05 percent year-on-year to Rs 5.89 trillion. By end-April 2021, the subscriber base of various NPS schemes had risen to 42.675 million, up from 34.601 million in April 2020, a year-on-year growth of 23.33 percent. As compared to the previous month, the subscriber base under the NPS and APY hit 42.4 million. This indicates that there has been a 200,000-subscriber jump this month. NPS's AUM increased to Rs 5.89 trillion this month from Rs 5.78 trillion in March.

Read more about: nps pfrda
Story first published: Thursday, May 20, 2021, 17:03 [IST]
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