Some big changes are going to happen soon for the subscribers of National Pension System i.e. NPS. The pension regulator is also preparing to change the NPS Withdrawal Rules with a guarantee of minimum returns.
Pension regulator engaged in this preparation
According to a report in the English newspaper ET, the Pension Fund Regulatory & Development Authority (PFRDA) is preparing to give the option of Systematic Lumpsum Withdrawal (SLW) to the subscribers of NPS. On getting this facility, NPS subscribers will be able to choose the option of withdrawing money in installments as per their convenience.
you can choose your time
The report quoted PFRDA Chairman Deepak Mohanty as saying that with the facility of systematic lumpsum withdrawal, NPS subscribers will be able to avail periodic withdrawals on a monthly, quarterly, half-yearly or yearly basis. It will be possible to take advantage of this till the age of 75 years.
Deferral facility till the age of 75 years
At present, NPS subscribers get the option of making a lump sum withdrawal of 60 per cent of the amount at the age of 60 years. The remaining 40 per cent amount is compulsorily used to buy annuity. After the change in rules, the subscriber can defer the lumpsum withdrawal till the age of 75 years and instead opt for the facility of withdrawal in installments. This will give them the option to withdraw the amount they need, for which they will have to request every year.
Profit on both account types
This change will benefit NPS subscribers who do not want to make lump sum withdrawals. In these cases, after the amount they withdraw, they will continue to get returns on the remaining funds as per the rules of NPS. The PFRDA chairman says that both Tier-1 and Tier-2 subscribers of NPS will get the benefit of the changed rules. He said that the new rules can be implemented by the end of this quarter.
Work on minimum return guarantee
Earlier, PFRDA chairman had told Money Control that Minimum Assured Return Scheme can be started under NPS. He had said that the pension fund regulator is working on the Minimum Assured Returns Scheme ie MARS under NPS. It can be started in the near future. However, this will also increase the cost for the subscribers of NPS.
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