The Pension Fund Regulatory and Development Authority (PFRDA) has allowed subscribers to withdraw the entire accumulated pension wealth without purchasing annuity if the pension corpus is less than Rs 5 lakh.
Currently, NPS subscribers having a corpus of over Rs 2 lakh at the time of retirement or attaining the age of 60 years need to buy an annuity, offered by insurance companies, on a mandatory basis. They can take out the remaining 60 per cent as a lump sum.
In a gazette notification, the pension regulator also stated that the premature withdrawal limit on a lumpsum basis for NPS has been increased to Rs 2.5 lakh from Rs 1 lakh.
“…where the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than a sum of Rs 5 lakh, or a limit as specified by the Authority, the subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing annuity and upon such exercise of this option, the right of such subscriber to receive any pension or other amount under the National Pension System or from the government or employer, shall extinguish,” it said.
The regulator also increased the maximum age of entry into the National Pension System (NPS) from 65 to 70. The exit age limit has also been extended to 75 years.