NPS Rule Change: Now, Withdraw Full Contributions Without Buying Annuity; Check Conditions Here

Now, subscribers can withdraw the full contributions at one go without purchasing annuity if the corpus is equal to or less than Rs 5 lakh.

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New Delhi: Here is a news for NPS subscribers looking to withdraw their corpus! In a notification, the Pension Fund Regulatory and Development Authority (PFRDA) has allowed subscribers to withdraw the entire accumulated pension wealth without purchasing annuity if the pension corpus is less than Rs 5 lakh.

What are the major changes for NPS subscribers?

According to the existing rule, NPS subscribers with a corpus of over Rs 2 lakh at the time of retirement or turning 60 years has to mandatory buy an annuity, offered by insurance companies.

Subscribers have the option to take out the remaining 60 per cent as a lump sum. Now, subscribers can withdraw the full contributions at one go without purchasing annuity if the corpus is equal to or less than Rs 5 lakh.

"...where the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than a sum of Rs 5 lakh, 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," it said.

The pension regulator also informed that the premature withdrawal limit on a lumpsum basis for NPS has been increased to Rs 2.5 lakh from Rs 1 lakh. Besides this, the maximum age of entry into the National Pension System (NPS) has been raised from 65 to 70. The exit age limit has also been extended to 75 years.

The NPS subsrciber can now choose benefits either from the old pension scheme or accumulated pension corpus under NPS in the event of their death during service.