The Government of India established Pension Fund Regulatory and Development Authority (PFRDA) on 10th October 2003, which has to develop and regulate the pension sector in the country.
The National Pension System (NPS) was the launch for providing retirement income to all citizens. NPS aims to institute pension reforms and to inculcate the habit of saving after retirement amongst the citizens.
Its advantage pension plans provide financial security and stability during old age when people don’t have a regular source of income are its advantages. A retirement plan ensures that people should live with pride and without compromising on their standard of living during advancing years.
In the meantime, a pension scheme gives an opportunity to invest and accumulate savings and get a lump sum amount as regular income through an annuity plan on retirement.
NPS premature exit rules who are joined NPS between the age group of 18 and 60 can make a lump sum withdrawal before reaching the age of 60 or superannuation of their corpus is less than Rs.2.5 lakh or equal. In case the account corpus or investment is equal to or less than 2.5 lakh for government sector subscribers, a lump sum settlement on premature exit would be applicable.
Somehow the collection is more than 2.5 lakh, so a minimum of around 80% of the accumulated pension amount should be used to purchase an annuity and the remaining 20% is handed to the subscriber as a lump sum. In case the investment amount is equal to or less than 2.5 lakh, a lump sum payment is made to the non-government sector.
An individual should invest a minimum of 40% of the amount in the annuity, with the option of withdrawing the balance in a lump sum. You can Use the NPS calculator to get an estimate of your scheme amount.
The lump-sum should postpone till a subscriber attains the age of 70 years for withdrawal.
In the event, accumulating the pension is being less than Rs.2 lakh, an individual can choose to withdraw the complete amount. And for the corporate sector employees, an individual should have maintained an account for at least 10 years.80% of the amount should be used to purchase an annuity.
Supposed of the accumulated pension being less than Rs.1 lakh, every individual can choose to withdraw the complete amount. If discus the partial withdraws, A subscriber can withdraw only 3 times during the tenure of his/her subscription A subscriber should maintain a minimum gap between 2 withdrawals in 5 years. This gap can be able to reduce only during medical emergencies.
Subscribers can withdraw only up to 25% of their contributions towards this scheme.
A subscriber should have been a member of this scheme for at least 3 years to be eligible for partial withdrawal.
Partial withdrawal is allowed only in certain exceptional cases, like education of children, marriage expenses, house construction, or medical emergencies.
Follow and connect with us on Facebook, LinkedIn & Twitter
