NPS Scheme: At present, a NPS account holder can withdraw the entire money up to Rs 2 lakh.
New Delhi: NPS Scheme – In a good news for retired persons, National Pension System (NPS) account holders would soon able to withdraw their entire lifetime contributions. This will be big boost for pensioners who might require the NPS amount to take care any emergencies or want to invest into some other schemes. The pension regulator is mulling on formulating a better option for NPS account holders. Under this, pensioners would be allowed to withdraw their entire money at one go, IANS reported quoting sources in the government.
Pension Fund Regulatory and Development Authority (PFRDA) is working on an option which will allow NPS account holders withdraw their entire money if pension corpus is up to Rs 5 lakh.
NPS Account holders Now withdraw up to Rs 2 lakh
At present, a NPS account holder can withdraw the entire money up to Rs 2 lakh
Beyond the Rs 2 lakh threshold limit, currently only 60 per cent of pension corpus could be withdrawn and 40 per cent of the contributions has to be mandatory kept in government approved annuities.
Pensioners to withdraw Rs 5 lakh?
The plan is to increase the threshold to Rs 5 lakh that will offer better liquidity to a certain segment subscribers, the IANS report said.
Also, at a corpus of Rs 5 lakh, the regular pension amount would be too insignificant to provide any significant income for life to the NSP subscribers.
However, even with changed withdrawal plan, PFRDA is expected to provide the option of retaining a portion of subscribers pension money for investment in annuities or for investment by pension fund managers itself.
Better Returns for Pensioners
The changes are being thought as returns of annuities at present average around 5.5 per cent. Together with inflation and income tax on pension accumulation, the return for subscribers from annuities falls in the negative territory. Changed would give subscribers wider option to increase returns on their lifetime contributions.