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NPS: Check Conditions To Withdraw Entire Accumulated Pension Without Purchasing Annuity

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A subscriber can now withdraw 100 per cent of their accrued pension corpus under NPS without purchasing an annuity, according to the withdrawal and exit rule set by Pension Fund Regulatory And Development Authority (PFRDA). Subscribers of the National Pension System (NPS) can currently withdraw up to Rs 2 lakh from their accumulated corpus. Pensioners can withdraw 60% of their contributions after this threshold has been exceeded, and the remaining 40% of the corpus must be used to purchase annuities. Here are the latest guidelines issued by PFRDA for NPS withdrawal, under the National Pension System Amendment Regulations, 2021.

 
NPS: Check Conditions To Withdraw Entire Accumulated Pension Without Annuity

According to the PFRDA, "where the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than a sum of five lakh rupees, or a limit as specified by the Authority, the subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing annuity and upon such exercise of this option, the right of such subscriber to receive any pension or other amount under the National Pension System or from the government or employer, shall extinguish."

The PFRDA Amendment Act further has clarified that "if the accumulated pension wealth of the subscriber is equal to or less than two lakh fifty thousand rupees or a limit to be specified by the Authority, such subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing any annuity and upon such exercise of this option the right of the subscriber to receive any pension or other amounts under the National Pension System shall extinguish and any such exercise of this option by the subscriber, before the notification of this provision, shall be deemed to have been made in accordance with this regulation."

To withdraw NPS corpus at the time of death of the subscriber. The PFRDA Amendment Act has also stated that "if the accumulated pension wealth in the permanent retirement account of the subscriber at the time of his death is equal to or less than Five lakh rupees or a limit to be specified by the Authority, the nominee or legal heir(s) as the case may be, shall have the option to withdraw the entire accumulated pension wealth without requiring to purchase any annuity and upon such exercise of this option the right of the family members to receive any pension or other amounts under the National Pension System shall extinguish."

 

For purchasing government-approved annuities, the PFRDA Amendment Act has also clarified that "where a subscriber attains the age of sixty years or superannuates in accordance with the service rules applicable to such subscriber, at least forty percent out of the accumulated pension wealth of such subscriber shall be mandatorily utilized for purchase of annuity providing for a monthly or any other periodical pension and the balance of the accumulated pension wealth, after such utilization, shall be paid to the subscriber in lump sum. In case, the accumulated pension wealth of the subscriber is equal to or less than a sum of five lakh rupees, the subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing any annuity."

Read more about: nps national pension system
Story first published: Monday, July 5, 2021, 14:23 [IST]
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