In the latest rule change, PFRDA (Pension Fund Regulatory And Development Authority) has relaxed the withdrawal norms to the effect that now the subscribers can withdraw upto 25% of contributions starting from the third year of opening of NPS (National Pension System) account. The latest rule change has been effective from January 10 this year as per the latest circular signed by PFRDA's chief general manager Venkateshwarlu Peri. NPS, which is a voluntary, defined contribution retirement savings scheme, enables the subscriber to accumulate savings during his or her working life. National Pension Scheme (NPS) offers two types of accounts - Tier I and Tier II. The Tier 1 account is non-withdrawable till the person reaches the age of 60. Partial withdrawal before that is allowed in specific cases. On the other hand, the Tier II National Pension Scheme account is just like a savings account and subscribers are free to withdraw the money as and whenever they require.
Ten Things To Know About Relaxation of NPS Withdrawal Rules
1. The partial withdrawal can be made to the limit of 25% of the contributions made by the subscribers, but excluding contributions made by the employer.
2. The purpose of withdrawal is defined by the PFRDA. The purpose of withdrawal include treatment of specified illness of a family member, education of children, wedding expenses of children and purchase or construction of house.
3. The education expenses can be made for the subscriber's own children including the legally adopted children.
4. The marriage expenses can be a reason for withdrawal so long as the subscriber's own child is getting married, including his/her legally adopted child.
5. To be able to withdraw the money for construction of house, the subscriber must make sure that the house belongs to him/her or in a joint name with his/her legally wedded spouse, that too if the subscriber doesn't own more than one house besides the ancestoral property.
6. For the treatement, the permission to withdraw upto 25% can be made allowed only if the diseases suffered fall in the category of diseases such as cancer, kidney failure, multiple sclerosis, major organ transplant, stroke, heart valve surgery, coma, paralysis and total blindness, among a few other major ailments.
7. The subscriber can withdraw for a maximum of three times during the entire tenure of subscription.
8. For withdrawal, subscriber must make the request to the central record keeping agency or the national pension system trust through the nodal office.
9. In case the subscriber is suffering from an ailment, as mentioned in the clause, the request can be made by a subscriber's family member.
10. The rules have been effective from January 10, 2018 onwards.
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