Pension Boost: National Pension System Makes Partial Withdrawals Easier

by Psu Connect
Date: 20-01-24

The Pension Fund Regulator and Development Authority has introduced new norms for withdrawing pensions through the National Pension System [NPS] with effective from February 1, 2024.

Pension Boost: National Pension System Makes Partial Withdrawals Easier

According to the new regulations, subscribers can now withdraw a maximum of 25 percent of their contributions from their pension accounts, excluding the employer’s share. The partial withdrawal is subject to specific conditions and purposes. The Subscribers must be members of the NPS for a minimum of three years from the date of joining.

The withdrawal amount is fixed at one-fourth of the subscriber’s total contributions, with a maximum of three partial withdrawals during their entire subscription period. To initiate a withdrawal, subscribers need to submit a request with a self-declaration stating the purpose for withdrawal to the central recordkeeping agency [CRA] through their respective government nodal office or point of presence.

In addition to this, NPS corpus is fit to reach Rs 12 trillion by March:

As per the PFRDA officials, the assets under management under the National Pension System including Atal Pension Yojana has risen about 28% on year to Rs 11 trillion as of January this fiscal. It is predicted to reach Rs 12 trillion by March 31. According to the NPS norms, a maximum of 60% of the accumulated NPS corpus from contributions during a person’s working years is allowed to be withdrawn tax-free at the time of retirement. The subscriber has to mandatorily invest a minimum of 40% of the corpus in annuities for a regular pension.

The average annual returns since inception have been 9.06% in corporate bonds, 8.62% in government securities, 9.46% in central government scheme, and 9.32% in the state government scheme.