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09 Jul, 2013 10:50 PM

Proposal to allow full withdrawal from NPS on retirement

Proposal to allow full withdrawal from NPS on retirement
The Cabinet may discuss changes in the withdrawal rules for the New Pension Scheme (NPS) on July 11.

The proposal is to permit a subscriber to withdraw his/her entire fund on retirement, if the amount is Rs 2 lakh or lower.

The condition in all such cases would be that a subscriber would have to make a request for an ‘opt-out’ option. At present, over 4,400 accounts have accumulated amounts of Rs 2 lakh or lower. Out of these, nearly 680 have made a request for withdrawal. However, the proposal, once approved, will not apply to accounts opened under the Swavalamban scheme.

Normally, an individual can exit either at or after the age of 60. However, from March 2013, subscribers were allowed to stay invested till the age of 70, but with some conditions, such as no contribution or part withdrawal between the ages of 60 and 70.

At the time of exit, 60 per cent of the total amount is given as lumpsum, while 40 per cent is used to purchase an annuity, which provides lifetime pension to an employee and his dependent parents/spouse at the time of retirement.




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