The Pension Fund Regulatory and Development Authority (PFRDA) has rolled out a new circular outlining provisions for the withdrawal of pensions under the National Pension System (NPS). These provisions are slated to take effect from February 1, 2024.
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The latest regulations by PFRDA stipulate that subscribers can withdraw no more than 25% of their contributions from their pension accounts, excluding the employer's contribution.
Partial withdrawals are permitted for the following purposes, as per the new rules:
Prerequisites for partial withdrawals:
How to process withdrawal requests?
To initiate a withdrawal request, subscribers must submit the request along 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.
If a subscriber has an ailment listed, their family member can submit a withdrawal request. Upon receiving a withdrawal request, the Point of Presence or Government Nodal Office will identify the recipient.
Partial withdrawal requests will be processed by CRA only after successful verification of the subscriber's bank account using methods such as penny drop.
To initiate the penny drop verification, CRAs conduct a 'test transaction' by depositing a small amount into the subscriber's account and checking if the name matches. In simple terms, the bank account needs to pass this 'penny drop' check for any withdrawal request to go through or for changes to the account details.
(Edited by : Amrita)
First Published: Jan 18, 2024 9:29 AM IST
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