NPS subscribers can now make partial withdrawals from account
New Delhi: Subscribers of National Pension System will get to withdraw up to 25% from their pension fund accounts under certain circumstances, Pension Fund Regulatory and Development Authority, said. After 10 years as an NPS subscriber, you can make such partial withdrawals for big-ticket expenses like children’s marriage, higher education, construction or purchase of first house and treatment for critical illness for self, spouse, kids or dependant parents. Being a long-term investment product to accumulate a retirement fund, NPS till now didn’t allow for any partial withdrawals; however, the PFRDA Act, 2013 made provisions for partial withdrawals to offer some kind of liquidity to the investors to meet urgent big tickets expenses. Given that annuity is a long-term pension product, the minimum eligible age to buy an annuity is typically higher; so, even as NPS allows for early exits, you will still need to wait till you are eligible to buy an annuity with 80% of that corpus. So, even if a subscriber wants to exit NPS, he will have to wait till he becomes eligible to annuitize his money,” said Shukla.
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