The National Pension Scheme (NPS) is a social security initiative by the Central Government and is open to employees from the public, private, and even the unorganized sectors. NPS encourages people to invest in a pension account at regular intervals during the course of their employment. After retirement, the subscribers can take out a certain percentage of the corpus. NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Pension fund regulators said in a statement that the number of members of various pension schemes increased by 24% to Rs 463 million as of the end of September 2021.
Recently, there have been some changes to the NPS rules. Have a look:
Extension of the online exit process to Government sector NPS subscribers
PFRDA recently extended the online and paperless process of exit to the subscribers of the Government Sector as an option in addition to the existing physical mode of exit.
In a circular dated October 4, 2021, the regulator said, “The online exit would be integrated with Instant Bank Account Verification as per the existing guidelines as part of enhanced due diligence in the interest of Subscribers. The facility would also be available to the employees of Autonomous Bodies of Central/State Government who are covered in NPS.”
New Entry Rule
The regulator recently increased the entry age into NPS to 70 years. Earlier the entry age was 65 years. Now, anyone between 18-70 years would be able to subscribe to NPS. With the new entry age rule, even subscribers who have exited from NPS can reopen their accounts.
3) Exit norms revised
On the exit conditions for subscribers joining NPS beyond the age of 65 years, the circular said “normal exit shall be after 3 years”. “The subscriber will be required to utilize at least 40 percent of the corpus for purchase of annuity and the remaining amount can be withdrawn as a lump sum,” it said. However, if the corpus is equal to or less than ₹5 lakh, the subscriber may opt to withdraw the entire accumulated pension wealth in a lump sum, it said.
4) Postpone NPS account until 75 years
NPS account owners are allowed to postpone their accounts until they are 75 years old.
5) Extension of online termination process NS Government sector
PFRDA recently extended the paperless exit process online to government sector subscribers. Previously, only non-governmental subscribers enjoyed the end-to-end capabilities of the online termination process. “Online exits will be integrated with instant bank account verification according to existing guidelines as part of enhanced due diligence for the benefit of subscribers. The facility will also be used by employees of central / state government autonomous bodies. Available. NPS. ”Regulators said in a circular dated October 4, 2021.
6) New premature exit rule
If you are planning, premature exit from National Pension System (NPS), You will get only 20% of your accumulated wealth under NPS as a lump sum. With the remaining amount, you will have to buy an Annuity. This 80:20 rule will be applicable for both the Government and Non-Government sector subscribers joining NPS between 18-60 years. However, in the case of the Non-Government sector, the person should be a subscriber for 10 years.
