New Delhi: The National Pension System (NPS) will accept pension withdrawals under new criteria proposed by the Pension Fund Regulatory and Development Authority (PFRDA), which will go into effect on February 1, 2024. The terms under which members may want to withdraw a portion of their pension funds are outlined in these rules.
Withdrawal Limitations
Stakeholders may withdraw up to 25% of their contributions—less the employer's share—from their pension funds, following the revised regulations. Nevertheless, there are some requirements and goals associated with this partial withdrawal. (Also Read: APY: In 42 Years, A Monthly Contribution Of Rs 210 Can Get A Monthly Pension Of Rs 5,000)
Permissible Partial Withdrawals
The amended regulations permit partial withdrawals for a number of purposes, such as the subscriber's children's higher education costs, marriage expenses, the purchase or construction of residential real estate, medical costs associated with specific illnesses, expenses related to disabilities, skill development, reskilling, and the formation of a business or startup. (Also Read: Ramesh Babu, the "billionaire barber," An Inspirational Journey From Simple Beginnings To A Fleet Of 400 Cars.)
Prerequisites For Withdrawals
Partial withdrawals are only available to subscribers who have been NPS members for three years or longer from their membership date. There is a maximum of three partial withdrawals allowed per subscriber throughout the duration of their membership, with the withdrawal amount being restricted at one-fourth of their total contributions.
Processing Withdrawal Requests
Subscribers must contact their respective government nodal office or point of presence to initiate a withdrawal by submitting a request to the central recordkeeping agency (CRA) together with a self-declaration outlining the reason for the withdrawal.
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