National Pension System: New rule allows monthly withdrawal till age 75 without buying an annuity

financialexpress.com:

National Pension System Systematic Lump Sum Withdrawal Rule 2023: The Pension Fund Regulatory and Development Authority (PFRDA) has issued a circular providing the facility of Systematic Lump Sum Withdrawal (SLW) for National Pension System (NPS) subscribers.

“In accordance with Regulation 3 and Regulation 4 of PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015 and amendments theirein, it is proposed to provide the option of phased withdrawal of the lump sum through Systematic Lump Sum Withdrawal (SLW) facility,” the PFRDA said in its circular dated 27 October 2023.

As per PFRDA, NPS subscribers will now be allowed to withdraw up to 60% of their pension corpus through the SLW on a periodical basis (monthly, quarterly, half-yearly or annually) for a period till 75 years of age as per the choice at the time of their normal exit.

“The subscribers are allowed to withdraw up to 60% of their pension corpus, through the SLW on a periodical basis viz. monthly, quarterly, half-yearly or annually for a period till 75 years or age as per the choice at the time fo their normal exit,” the regulator said.

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Earlier, NPS subscribers were allowed to defer availing of annuity and withdrawing the lump sum on any contribution till 75 years of age. The lump sum withdrawal was allowed in a single tranche or on an annual basis. When withdrawn annually, subscribers had to initiate the withdrawal request each time.

“As per the existing exit guidelines, the subscribers post 60 years/superannuation can defer availing of annuity & withdrawing the lump sum on any combination till 75 years of age. The lump sum amount can withdrawn in a single tranche or it