Good News for Senior Citizens! PFRDA revises ENTRY age, EXIT guidelines under NPS; Check the recently changed rules here
The Pension Fund Regulatory and Development Authority (PFRDA) has revised the existing age of entry from 18-65 years to 18-70 years.
The Pension Fund Regulatory and Development Authority (PFRDA) has made some changes in the rules and guidelines for the National Pension Scheme (NPS). The new rules and guidelines can be a beneficial move for the senior citizens, who are planning to be a part of the financial scheme.
PFRDA has mentioned that in response to the large number of requests received from the existing subscribers to remain invested under NPS beyond 60 years or beyond their superannuation, and the desire from citizens above 65 years to open NPS, it has been decided to increase the entry age of NPS in the interest of Subscribers and benefit them with the opportunity of creating a long-term sustainable pension wealth.
The existing age of entry which is 18-65 years has been revised to 18-70 years.
Accordingly, PFRDA has revised the guidelines on entry and exit. Any Indian Citizen, resident or non-resident and Overseas Citizen of India (OCI) between the age of 65-70 years can join NPS and continue or defer their NPS Account up to the age of 75 years. Those Subscribers who have closed their NPS Accounts are permitted to open a new NPS Account as per increased age eligibility norms.
The features and benefits of the increased age of entry are as mentioned below,
Choice of Pension Fund (PF) and Asset Allocation: The Subscriber, joining NPS beyond the age of 65 years, can exercise the choice of PFand Asset Allocation with the maximum equity exposure of 15 per cent and 50 per cent under Auto and Active Choice respectively. The PF can be changed once per year whereas the asset allocation can be changed twice.
Exit and withdrawals: The exit conditions for subscribers joining NPS beyond the age of 65 years will be as under: (a) Normal Exit shall be after 3 years. The subscriber will be required to utilize at least 40 per cent of the corpus for purchase of annuity and the remaining amount can be withdrawn as lump sum.
However, if the corpus is equal to or less than Rs 5 lakh, the Subscriber may opt to withdraw the entire accumulated pension wealth in lump sum. (b) Exit before completion of 3 years shall be treated as Premature Exit. Under pre-mature exit, the subscriber is required to utilise at least 80 per cent of the corpus for purchase of annuity and the remaining can be withdrawn in lump sum.
However, if the corpus is equal to or less than Rs 2.5 lakh, the subscriber may opt to withdraw the entire accumulated pension wealth in lump sum. (c) In case of unfortunate death of the subscriber, the entire corpus will be paid to the nominee of the subscriber as lump sum.
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NPS Tier II Account: The Subscribers are also eligible to open Tier II Account for investing their disposable income to optimise their returns, which unlike Tier-I account can be withdrawn at any time.
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