The Pension Fund Regulatory and Development Authority (PFRDA) has made changes in the rules for premature withdrawal from the National Pension System (NPS). According to the PFRDA circular dated 21 September 2021, if the investor’s NPS in the fund is equal to or less than Rs 2.5 lakh, the entire amount will be paid in one lump sum. At the same time, only 20% of the amount deposited will be allowed to be withdrawn, while the balance amount will be used to buy annuity.
According to the circular, this 80:20 rule of premature withdrawal will be applicable to both public and non-government sector investors joining NPS between 18-60 years of age. However, in case of non-government sector, the individual should be an investor for 10 years.
It is worth noting that normal withdrawal from NPS is allowed at the age of 60 years or more. Therefore, for anyone planning to exit before the age of 60, the new rules for premature withdrawal will be applicable. In normal withdrawal, if the fund is less than or equal to Rs 5 lakh, the entire amount can be withdrawn as a lump sum. If the fund is more than Rs 5 lakh, then at least 40 per cent of the accumulated pension amount of the investor has to be used for the purchase of annuity.
In case of death of subscriber
In case of unfortunate death of the subscriber, the subscriber’s deposited pension amount will be given to the legal heir of the non-government subscriber. In case of a government subscriber, a lump sum amount is given to the legal heirs if the fund is less than or equal to Rs 5 lakh. If the fund is more than Rs 5 lakh, then at least 80 per cent of the accumulated pension wealth of the subscriber will be used by the dependents to buy the default annuity key. The remaining 20 per cent will be paid as a lump sum.
Amendment in the rule of suspension of family pension
The Central Government has amended a decades-old policy relating to suspension of family pension to the spouse of a deceased government employee on charges of abetting the employee’s murder or abetment of such offence. Provision under the Central Civil Services Pension Rules, 1972, if any person who is eligible to receive family pension on the death of a Government servant or pensioner is charged with the offense of murder or abetment of such Government servant or pensioner So as per the new rule, other eligible family members will be eligible to receive family pension till the disposal of criminal proceedings against the spouse of the deceased employee.
If the spouse is proved not guilty of the charge of murder, the family pension shall be payable to him from the date of acquittal. Wherein, if at the conclusion of criminal proceedings, the person concerned is convicted of murder or abetting the murder of a Government servant, he shall be debarred from receiving family pension.
No proposal to stop pension of pensioners in the age group of 70-75
Government today clarified that there is no proposal to discontinue pension of Central pensioners in the age group of 70-75 years and no such proposal is under consideration. Referring to the news published in this regard in a West Bengal magazine and an online portal, the Finance Ministry said that this news is completely untrue as no such proposal is under consideration. Giving this information through fact check of the Press Information Office, he said that such news was published on September 13, while there is no such proposal for central pensioners.
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