Pension Fund Regulatory and Development Authority (PFRDA) has released a new circular stating fresh provisions for the withdrawal of pensions under the National Pension System (NPS), which will come into effect from February 1, 2024. The updated rules suggest that “a subscriber is permitted to make a partial withdrawal not exceeding 25 per cent of their contributions to their individual pension account excluding the employer’s contribution.” In addition, the subscriber must be a member of the NPS for at least three years from the date of joining.
A subscriber is allowed to make a maximum of three partial withdrawals throughout their tenure at NPS.
PFRDA will allow the withdrawal for the following purposes
Higher education of the subscriber’s children, including a legally adopted child.
Marriage of the subscriber’s children, including a legally adopted child.
In case of purchase or construction of a residential house or flat in the subscriber’s name or joint name with their legally wedded spouse. However, if the subscriber already owns a residential home or flat (other than ancestral property), no withdrawal shall be permitted in such cases.
Treatment of specified illnesses, including hospitalisation and treatment expenses for diseases such as cancer, kidney failure, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, Covid-19 and more.
Medical and incidental expenses arising from the disability or incapacitation suffered by the subscriber.
Expenses incurred by the subscriber for skill development/re-skilling or any other self-development activities.
Expenses incurred by the subscriber for the establishment of her/his own venture or any start-ups.
How to apply
The subscriber must submit the withdrawal request to the central recordkeeping agency (CRA) through their respective government nodal office or point of presence, together with a self-declaration outlining the reason for the withdrawal, in order for the request to be processed. The request made by the subscriber will only be processed by the CRA after successfully verifying the subscriber’s bank account.
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