NPS Withdrawal Rule: If a private sector employee wants to voluntarily close his Permanent Retirement Account Number (PRAN), then the rule of premature withdrawal applies, provided he is registered with NPS for five years.
NPS Withdrawal Rule: NPS (National Pension System) account is a retirement saving scheme run by the Government of India for government employees and the general public. It is a long-term investment scheme that helps investors to get regular pension after retirement. There is a facility to invest in this scheme till the age of 60 years. After that the pension starts. However, in the meantime, the question may arise in the minds of many that how can we close this account prematurely and withdraw money. Let us tell you its step-by-step process.
Rules for government employees
Premature exit from NPS for a government employee applies when the employee resigns, voluntarily leaves the job, is fired from the job, or is removed by the government. If the amount is equal to or less than ₹2.50 lakh on the date of initiation of the premature exit request, the entire amount can be withdrawn in one go. If the amount is more than ₹2.5 lakh, at least 80% of the total pension assets must be used to purchase an annuity. This will provide a monthly pension to the subscriber. The subscriber will receive a lump sum payment of the remaining 20%.
How to withdraw?
- Log in to the NPS portal.
- Go to the “Withdrawal Request” section.
- Upload the required documents and submit the request.
- The money will be credited to your bank account once the request is approved by PFRDA.
Rules for private sector employees
If a private sector employee wishes to voluntarily close his Permanent Retirement Account Number (PRAN), the premature withdrawal rule applies, provided he has been registered with NPS for five years. If the corpus is equal to or less than ₹2.50 lakh on the date of initiation of premature withdrawal request, the entire corpus can be withdrawn as a lump sum, as is the case in the government sector. Similarly, if the corpus initiated is more than ₹2.5 lakh, at least 80% of the corpus must be used to purchase an annuity. For subscribers joining NPS after the age of 60, premature withdrawal before completion of three years under NPS is applicable. The rules and regulations for the non-government sector are the same as for subscribers who joined NPS before the age of 60. In case of untimely death of the subscriber, his nominee will receive the entire amount as a lump sum payment, or the nominee can choose to receive an annuity.
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