The facility can be used by NPS subscribers from April 1.
Pension Fund Regulatory and Development Authority will facilitate an online withdrawal facility to the subscribers of National Pension System (NPS) starting from April 1.
In a circular, PFRDA said, “In order to facilitate and expedite the process for settlement of the withdrawal claims of the subscribers of National Pension System (NPS), it has been decided that all the nodal offices (PAO’s/DDO/POP’s/Aggregators etc.) shall process the withdrawal claims of their underlying subscribers on the online platform being made available on the CRA system. The processing of all withdrawal claims on online mode shall be mandatory from April 01.”
As of now, NPS has three exit options. Firstly, exit from NPS after attaining normal superannuation or 60 years provides 60% of accumulated corpus as a lump sum payment and annuitizes the rest for monthly payout. Similarly, if a subscriber exits before attaining the age of 60 years, 80% of accumulated corpus is annuitized. Finally, in case of death, the entire accumulated corpus is paid to the nominee or legal heir of the subscriber.
Last year, PFRDA had proposed to allow partial withdrawal of up to 25% of the accumulated corpus of NPS account. However, NPS subscribers can only withdraw for higher education or for children’s marriage, construction or purchase of first house and treatment of specific ailments like cancer, kidney failure, paralysis etc.
NSDL e-governance has developed the first phase of this platform to process withdrawal request for subscribers.
To avail this facility, subscribers need to place a withdrawal or claim request either through their NSDL account or through point of purchase (POPs). POP is an entity for channelizing pension products to subscribers. These entities act as collection points and extend a number of customer services to NPS subscribers, including requests for withdrawal from NPS. Almost all the banks (both private and public sector) and majority of stock broking firms are NPS POPs.
According to an earlier proposal, IFAs would be able to sell NPS by empaneling with any one POP under sub broking model called POP – sub entity (POP-SE). They have to pay a fee for registration to PFRDA and enter into an agreement with POP for POS-SE.
