NPS Partial Withdrawal Rule Amended For These Subscribers From January 1

In the wake of the COVID-19 pandemic, the Pension Fund Regulatory and Development Authority allowed NPS subscribers to partially withdraw their income. Customers can complete the process through online self-declaration form and money is transferred to their bank accounts. Now, the pension regulator has amended this rule and partial withdrawal of income from National Pension Scheme is not allowed.

The revision is only for government sector customers and will be implemented from January 1. Government sector pensioners include employees of Central Government, State Government and Central Autonomous Bodies. However, partial withdrawal facility is allowed for non-government sector employees with online self-declaration form. The Pension Fund Regulatory and Development Authority had issued a notice on December 23 citing the changes.

The notice reads, “The issue has been examined keeping in view the prevailing practices, circumstances and law, with a view to overcome the hardships related to the pandemic and with the relaxation of the lockdown restrictions, to make it mandatory for all public sector customers The decision has been taken. (Central/State Government and Central/State Autonomous Bodies) to submit their requests through their respective nodal offices”.

In order to protect the interest of customers and reduce the burden of verification and authorization on nodal officers including POPs, PFRDA issued a circular in January 2021 to deal with COVID as a special dispensation for the benefit of customers through self- Partial withdrawals were allowed under NPS through declaration. Epidemic. As per the above mentioned circular, once the instant bank account verification is done online, the online requests of the customers are handled in the CRA system immediately.

For partial withdrawal of income, these conditions must be satisfied-

1) The subscriber should be an NPS member for at least three years.

2) The amount of withdrawal should not exceed 25% of the NPS subscriber’s contribution.

3) During the period of NPS contribution, PFRDA allows a maximum of three partial withdrawals.

4) Withdrawals are permitted only for reasons that are specifically listed, such as:

a) Further education or marriage of children

b) purchase or construction of a residential accommodation

c) treatment of serious diseases

The regulator waived off the obligation to submit supporting paperwork to prove the reasons for partial withdrawal during the Covid-19 pandemic.

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