National Pension System
Updated NPS rules: If you also invest in the National Pension System (NPS) to secure your retirement, then there is news of great relief for you. Pension Fund Regulatory and Development Authority (PFRDA) has made major changes in the rules for exit from NPS. The government has now given you more freedom to use your own money, due to which your pockets will be fuller after retirement.
Pension will have to be purchased with 20% amount
According to the old rules, when a subscriber retired or scheme If someone exited the scheme, he had to invest at least 40 percent of his total accumulated capital in purchasing annuity. That means it was necessary to take a regular pension plan with that money. Only 60 percent of the amount was in hand.
But new rules have changed this mathematics. Now non-government sector investors will have to invest only 20 percent of the total deposited amount in annuity. This simply means that now you can withdraw 80 percent of your hard-earned money in lump sum. However, this benefit will be available to those investors who have completed at least 15 years in NPS.
Full withdrawal exemption on deposits up to Rs 8 lakh
PFRDA has taken a heart-warming decision even for small investors or those with low pension funds. If the total pension fund of an investor is Rs 8 lakh or less, then he will have no obligation to buy annuity. Such investors can withdraw their entire money at once or in installments.
Apart from this, one more slab has been built. If your total deposit is more than Rs 8 lakh but less than Rs 12 lakh, you will get the facility to withdraw up to Rs 6 lakh in lump sum. You can take the remaining amount as regular payment.
Strict rules for those who withdraw money quickly
While on one hand loyal investors have been rewarded, on the other hand the rules have been made a little stricter for those who leave the scheme midway. The government wants this money to be useful only in your old age. Therefore, if you exit NPS before the completion of 15 years or before the age of 60 years, you will have to invest 80 percent of your deposit in annuity. You will get only 20 percent of the amount in cash. However, if the total deposited amount is less than Rs 5 lakh, you can withdraw the entire amount.
Along with this, in the new rules, investors have been given the option to defer the decision of buying annuity and withdrawing money till the age of 85 years. Government employees will also be allowed to remain in NPS for 85 years after retirement, but at the time of exit, they will have to follow the old rule i.e. 40 percent annuity rule.
Read this also- So far so many employees have come from NPS to UPS, the government gave information in the Parliament.