New NPS Rules: Now you can open pension account even at the age of 65 years. The Pension Fund Regulatory and Development Authority (PFRDA) has extended the age limit to join the National Pension System (NPS). Now a person can open an NPS account till the age of 70 years. Apart from this, the NPS account holder has been allowed to defer his account till the age of 75 years. According to PFRDA, a large number of requests were received by the existing subscribers to continue investing in the NPS account beyond the age of 60 and people above 65 years of age showed interest in opening an NPS account. In such a situation, the regulatory body decided to increase the entry age in NPS so that they can make a large pension amount in the long run.
PFRDA has announced the features and benefits of opening an NPS account after 65 years of age. Subscribers will also be allowed to open Tier 2 account. Unlike NPS Tier 1 account, the amount in Tier 2 account can be withdrawn at any time.
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Maximum 50 percent exposure in PF and asset allocation
According to the circular issued by PFRDA dated 26 August 2021, the maximum limit of equity exposure for people joining NPS at the age of 65 years has been fixed. According to the circular, one can have equity exposure of maximum 15 percent in PF and asset allocation under auto choice and maximum 50 percent under active choice i.e. maximum 50 percent of the capital can be invested in equities. Apart from this, such subscribers can change the asset allocation once in a year and twice in the pension fund.
These accounts can be opened after the age of 65
An Indian citizen, resident or non-resident and Overseas Citizen of India (OCI) can open an NPS account between the age of 65-70 years and can defer their account till the age of 75 years.
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New rules for exit and withdrawal
- If you open an NPS account after 65 years of age, you can usually exit after 3 years. It is mandatory to buy an annuity from at least 40 per cent of the corpus and can withdraw the remaining amount. However, if the entire corpus is Rs 5 lakh or less, then the entire amount can be withdrawn in lump sum.
- You can exit before maturity i.e. even after completion of 3 years. In this case it is mandatory to buy an annuity from at least 80 per cent of the corpus and withdraw the remaining amount. However, if the entire corpus is Rs 2.5 lakh or less, then the entire amount can be withdrawn in lump sum.
- Unfortunately, if the subscriber dies, the nominee will get the entire amount in one lump sum.
(Article: Rajeev Kumar)