For Indian residents who work in the unorganized sector and are between the ages of 18 and 60, NPS - Swavalamban fund provides a monthly income after they reach retirement age. NPS - Swavalamban generates returns by investing a part of contributions in the equity market. Under NPS - Swavalamban, up to 55 percent of the capital is allocated in government securities and up to 40 percent in corporate bonds. At the age of 60, the NPS - Swavalamban account can be closed.
Swavalamban Subscribers with accumulated pension corpus of less than Rs 1 lakh with the exception of the government contribution and associated returns and who are not eligible to transfer to Atal Pension Yojana (APY) can now prefer to prematurely exit the scheme and receive a full lump sum payment of their accumulated pension wealth under the new rules. It's important to remember that subscribers of the NPS Swavalamban scheme between the ages of 18 and 40 were offered the alternative of migrating to the Atal Pension Yojana, which guarantees a minimum pension to members.
Swavalamban subscribers over the age of 40 who are unable to migrate to APY can stay in the Swavalamban scheme until they reach the retirement point of 60. So let's now talk about the new rules for premature exit of NPS Lite Swavalamban subscribers, according to PFRDA.
New Premature Exit Rules For NPS Lite Swavalamban Subscribers
According to the recent PFRDA announcement, Swavalamban Subscribers whose cumulative pension wealth does not surpass Rs 1 lakh and who are not eligible to switch to Atal Pension Yojana (APY) can elect to prematurely exit with lump-sum payment under the 6th Amendment of Exit Regulations. For a minimum of twenty-five years, regardless of whether they receive GoI co-contribution under Swavalamban, the above said eligible subscribers are not mandated or required to stay in the Swavalamban scheme for a minimum of twenty-five years. That being said, if those eligible subscribers took full advantage of the GoI's co-contribution, it can be withdrawn along with the returns made from the corpus at the time of their exit.
Premature withdrawal amount and claim procedure
After subtracting the Government's co-contribution, if any, and the returns thereon, the cumulative corpus of those Swavalamban Subscribers shall be determined, according to PFRDA. According to the notification the regulatory has clearly stated that "a Swavalamban subscriber who is aged 43 years (who could not be migrated to APY) has a corpus of Rs 1,04,000 in his Swavalamban PRAN and out of which, GoI's co-contribution and returns constitute Rs 4500. The subscriber shall be eligible for premature exit since the accumulated corpus in the PRAN would be Rs 99500( Rs 104000-Rs 4500=Rs 99500)." Swavalamban Subscribers who meet the aforementioned conditions and wish to exit early can lodge withdrawal applications to the respective POPs/Aggregators.
Withdrawal rule in case of death of the subscriber
In the event of demise. the whole corpus will be handed to the nominee/legal heirs. The nominee/legal successor should address the aggregator with the relevant documents such as the death certificate of the subscriber, identity proof of the nominee, and so on. The nominee is eligible to get a lump sum payment equal to 100 percent of the NPS pension fund. The nominee can subscribe to the NPS individually after satisfying the necessary KYC standards if he or she chooses to stay in NPS Lite Swavalamban.