New NPS withdrawal rule changes: Ten things National Pension System subscribers must know
National Pension System (NPS) fund withdrawals. 1)PFRDA has provided the facility of Systematic Lump Sum Withdrawal (SLW) for NPS subscribers. “…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.
“This will allow subscribers to set a cadence of how much and when they want to withdraw their balance, instead of being tied down with an annuity for the entire post-retirement period. This withdrawal can then be used to meet specific needs, where a larger corpus may be required," said Archit Gupta, Founder, and CEO, of Clear 2)NPS subscribers are allowed to withdraw up to 60% of their pension corpus, through the SLW on a monthly, quarterly, half-yearly, or annual basis for a period till 75 years of age as per the choice at the time of their normal exit. 3) For the withdrawal of funds by NPS subscribers, the pension regulator has also made 'penny drop' verification mandatory.
4) "The penny drop verification has to be necessarily successful with name matching, for processing the exit/withdrawal requests, and also for modifying the subscriber's bank account details," PFRDA said. 5) “As of October 25, 2023, instant bank account verification is now mandatory for advance withdrawals and exiting the NPS scheme. This change is aimed at ensuring the timely transfer of NPS funds to subscribers' accounts during withdrawals or scheme exits," said Amit Gupta, MD, SAG Infotech.
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