PFRDA Eases NPS Rules, Allows Higher Withdrawals and Longer Account Tenure

There is important news regarding the relaxation for the non-government members in the National Pension System. Now, the members holding accounts in the NPS are allowed to withdraw 80% of the amount at one time. Before the change, the withdrawal was allowed up to 60%. This move is expected to provide relief to millions of employees in the private sector along with the self-employed individuals. This is crucial in making the pension system flexible.

The Pension Fund Regulatory and Development Authority (PFRDA) has modified the terms and conditions for withdrawals from an NPS account, increasing the maximum age limit for withdrawal to 85 years, which was previously 70 years. This will enable subscribers to utilize their accounts for a longer period and draw money as and when needed. Previously, it was mandatory to purchase an annuity from the remaining 40% of the corpus, which provided a monthly pension, but this requirement has now been relaxed.

The new rules also allow financial institutions to take loans against NPS accounts within a prescribed limit. This will make it easier for account holders to access loans in times of need, eliminating the need to break their pension savings. This facility is considered particularly beneficial for those who require a large sum before or after retirement.