Under the new rule, NPS subscribers can withdraw money from their investments as per their need instead of a lump sum amount. If you are an NPS subscriber, then you will be able to withdraw the maturity amount on monthly / quarterly / half yearly or yearly basis as per your need. Let us know what is the Systematic Lumpsum Withdrawal (SLW) implemented by PFRDA?

What is systematic lumpsum withdrawal?

Under Systematic Lumpsum Withdrawal (SLW), you will be able to withdraw your money on monthly / quarterly / half yearly basis as per your need till the age of 75 years. Earlier there was a facility to withdraw this money on annual basis. Under the rules of PFRDA, the investor will have to request through online or offline mode after the lump sum payment option is activated. In this, you will have to mention how you want to withdraw the money, start date, end date etc. After SLW is activated, you cannot make any investment in your NPS account.

What will be the benefit?

If you choose SLW option, you will continue to have liquidity. NPS customers will be free to choose a lump sum amount along with systematic withdrawals for around 60% of their corpus fund. Apart from this, 40% will be used to buy annuity option. SLW facility will be available on Tier-1 account. The money withdrawn through this will be completely tax free. However, no change has been made in the rules of annuity.

How to apply:

If you are an NPS subscriber, you will have to apply for SLW option in online or offline mode. Customers will have to tell when they want to start this facility and when they want to end it? Apart from this, it will also be necessary to tell them that they want money on some account. The remaining amount after every payment will remain invested in NPS. You will also continue to get returns on this money.

What is the rule now?

You can withdraw 60 percent of the total amount deposited in NPS at one go. But it is necessary to buy an annuity plan for pension with the remaining 40 percent amount. You can withdraw 60 percent of the amount now at one go or on an annual basis. For this, the subscriber is required to apply every year.

On behalf of PFRDA, NPS officials have been asked to provide information about the new facility (SLW) to investors who will soon complete 60 years of age or wish to exit the scheme. On October 27, 2023, PFRDA had issued a circular giving information about the lumpsum withdrawal option. With the introduction of this facility, you will get many benefits.

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In response to this question in the Lok Sabha, Union Minister of State for Finance Bhagwat Karad said that with the increase in the amount in pension, the amount of pension i.e. installment will also increase. The increase in the subscription money of Atal Pension Yojana will put a burden on the subscribers. This is the reason why the government led by PM Narendra Modi has decided not to increase the Atal Pension Yojana pension money.

Government replied

According to Union Minister of State Bhagwat Karad, Atal Pension Yojana is a minimum guaranteed pension scheme and any increase in the pension amount will also increase the amount paid by its members, which is likely to further burden the subscribers. Hence the Government has decided to continue the scheme with the same terms and conditions and not to carry forward the pension and subscription amount.

Benefits of Atal Pension Yojana

Earlier, PFRDA Chairman Hemant Ji Contractor had sent a proposal to increase the pension for the purpose of increasing the subscriber base of Atal Pension Yojana. At present, the government gives 5 pension slabs ranging from Rs 1,000 to Rs 5,000 to the people who invest money in Atal Pension. PFRDA got response from the market in which most of the subscribers demanded increase in pension. Most everyone said that Rs 5,000 at the age of 60 is not enough in times of inflation.

This much pension is guaranteed

A person who enrolls and invests money in the Atal Pension Yojana gets a guaranteed maximum pension of Rs 5,000 per month till death after the age of 60 years. One can change the amount of pension once in a financial year. If the subscriber dies before the age of 60 years, the spouse can continue to make payments to the subscriber’s Atal Pension Yojana account. For those who are below 60 years of age, early exit is allowed under Atal Pension Yojana.

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The Pension Fund Regulatory and Development Authority (PFRDA) has recently made several changes for the National Pension System subscribers and pensioners. Here we are telling 5 changes in NPS rules that NPS account holders should know.

1. Now the commission will be available on opening

the account, the Point of Presence (PoP) opening the account of NPS will get the commission. POPs include banks, NBFCs and other entities. They register people in NPS and provide many more facilities to the subscribers. From September 1, 2022, POP will get commission from Rs 15 to Rs 10 thousand on opening the account.

2. Changes in the process of e-nomination

As per the new procedure, now the Nodal Office will have the option to accept or reject the one-time e-nomination request. If the nodal officer does not decide on the e-nomination within 30 days from the date of application, the request will be accepted through the Central Recordkeeping (CRA) system. This new rule is effective from 1 October.

3. No separate form for annuity plan

At the time of maturity, no separate form will be required to purchase annuity. IRDAI has taken this decision to relax the onboarding process for APS subscribers. Now exiting the NPS scheme will be treated as an offer to buy annuity from life insurance companies.

4. The process of submission of life certificate will be easier

IRDAI has asked insurance companies to simplify the process of submission of life certificate. It has asked insurance companies to follow Aadhaar based authentication or verification of life certificate.

5. Now Contribution will not be able to be made in Tier-II Account by Credit Card PFRDA has decided to stop the facility of payment of Contribution through Credit Card by making major changes in Tier-II Account of APS. PFRDA had given this information through a circulation on August 3. After this decision of PFRDA, the facility of payment by credit card for Tier-I account of NPS will continue, while for Tier-II account payment by credit card will no longer be possible. It is noteworthy that earlier the contribution could also be made through credit card in Tier-II account also.

What is NPS

Significantly, NPS is a government retirement savings scheme, which was launched by the central government in the year 2004. Since 2009, this scheme was also opened to people working in the private sector.

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Earlier it used to take four days after requesting for withdrawal. The Pension Fund Regulatory and Development Authority with the help of Central Recordkeeping Agencies (CRAS), Pension Fund (PFS) and Custodians has enhanced its IT capability along with improving the system interface, to reduce the time taken for transactions under NPS. can go

Earlier, IRDAI has made many changes to improve NPS.

Earlier, the insurance sector regulatory body IRDAI has simplified the process of buying annuity from NPS funds after retirement. For this, an important change has been made in the rules of the National Pension Scheme, due to which it has become even easier to arrange for regular income after retirement.

According to IRDAI, now no member of the scheme will have to fill any separate proposal form to buy annuity from his NPS fund after retirement. Because earlier, those investing in NPS had to submit an exit form to PFRDA (Pension Fund Regulatory and Development Authority (PFRDA)) as well as a proposal form to insurance companies to buy annuity at the time of retirement.

Actually, the work of providing annuity to NPS subscribers is done by those insurance companies, which have been approved by PFRDA for this. Along with this, IRDAI monitors this entire process as a regulator of insurance companies acting as Annuity Service Provider (ASP).

According to the PFRDA rules, it is necessary to invest at least 40 percent of the amount deposited in the NPS in the purchase of annuity, against which pension is given every month. The remaining 60 percent can be withdrawn in lump sum after retirement.

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