National Pension System: The premature withdrawal limit under NPS has been increased from Rs 1 lakh to Rs 2.5 lakh.
National Pension System
There is big news for those investing in the government pension scheme NPS. The Pension Fund Regulatory and Development Authority (PFRDA) has allowed subscribers to withdraw the entire amount without purchasing any pension plan in case the pension fund amount is less than Rs. At present, subscribers of the National Pension System (NPS) have to buy a pension plan offered by insurance companies at the time of retirement or having a pension corpus of Rs 2 lakh on attaining 60 years of age. He can withdraw the remaining 60 percent of the amount.
The pension regulator has said in a gazette notification that the premature withdrawal limit under NPS has been increased from Rs 1 lakh to Rs 2.5 lakh. The regulator has also increased the maximum age to enter NPS from 65 years to 70 years while the exit age limit has been raised to 75 years.
Pension fund assets cross Rs 6 lakh crore
The Asset Under Management (AUM) under pension schemes has crossed Rs 6 lakh crore. AUM level of over Rs 6 lakh crore under NPS and Atal Pension System (APY) has been achieved 13 years after PFRDA came into existence. AUM of Rs 1 lakh crore has been achieved in last seven months only. AUM of Rs 5 lakh crore under pension fund was achieved in October 2020.
NPS was started in 2004
NPS was initially notified for central government employees. It came into effect from January 1, 2004. Later almost all the state governments adopted it for their employees. After that, expanding the scope of NPS, it allowed all citizens and companies to join the scheme for their employees on a voluntary basis.
Withdrawing money from NPS made easy
In the Corona period, now pensioners will not need to go to submit the hard copy of the application to withdraw money. They can withdraw money from digital documents through POP. Pensioners can take advantage of this till 30 June 2021. According to the circular, all the records for withdrawal of money should be sent together and in soft copy to the CRA. If there is any dispute arising out of this transaction then the POP will be solely responsible for the same.
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