As per Pension Fund Regulatory & Development Authority, nowadays, PFRDA is receiving a lot of requests from the subscribers who have withdrawn their lump sum but have not yet availed the Annuity, about continuing with the National Pension System (NPS) Account. Now, it has been revealed that these Subscribers have the following options:-
-Open a new NPS account with new PRAN if they are otherwise eligible to join NPS.
-Continue in NPS with the same PRAN by redepositing the amount withdrawn earlier (upto 20%), into their NPS account (PRAN).
-The option of redeposit to continue the existing PRAN can be availed only once and needs to be deposited in one lump sum.
The enabling of redepositing the amount withdrawn earlier as referred to above, offers the benefit of preserving the legacy corpus and facilitating further accumulation in an uninterrupted manner to those NPS Subscribers who have partly exited from NPS but thereafter desirous of continuing in NPS with the same PRAN. The copy of the circular issued by PFRDA vide dt. September 23, 2020 enclosed for ready reference.
National Pension System (NPS)
National Pension System (NPS) provides opportunity to its subscribers to invest for their retirement through Pension Funds at a low cost. The beneficial features of NPS are its portability, flexibility, multiple convenient modes of depositing contributions, choice of pension funds, scheme preference, exclusive tax benefits etc. Under NPS, the subscribers are allotted a Permanent Retirement Account Number (PRAN), which is unique, and the subscribers can have one active PRAN at any given point of time and hence the subscribers can open a new NPS Account after closing their existing NPS Account.
Under NPS, a subscriber can opt to either prematurely exit or opt for final exit at the age of 60 years or on attaining superannuation or any time later as per regulations. In case of premature exit, up to 20% of the accumulated pension corpus in the PRAN can be withdrawn as lump sum and balance (80% or above) has to be utilized to buy annuity plan from an Annuity Service Providers (ASP) empaneled by PFRDA.