National Pension System (NPS) is a social security scheme of the central government which is also for government, private and unorganized sector employees. In this, people are encouraged to invest in a pension account at regular intervals during the course of their employment.
Subscribers can withdraw a part of this fund after retirement. NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
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The following changes have been made in the NPS rules recently:
Entry age increased
Pension Fund has raised the entry age in NPS to 70 years. Earlier it was 65 years. Any Indian citizen or Overseas Citizen of India (OCI) can invest till the age of 75 years by joining it till the age of 70 years.
change exit norms
Subscribers joining NPS after the age of 65 have to use at least 40 per cent of the fund to buy annuity and the rest can be withdrawn in lump sum. However, if the fund is less than Rs 5 lakh then this entire amount can be withdrawn in lump sum.
Change in asset allocation norms
Subscribers joining NPS after 65 years have been allowed to allocate up to 50 per cent of the fund to equity. However, if the subscribers opt for auto choice, then this share will be only 15 per cent.
PFRDA has said that exit before three years will be treated as premature exit. In this, the subscriber has to use at least 80 percent of the fund to buy an annuity and the rest can be withdrawn in a lump sum. If the fund is less than Rs 2.5 lakh then it can be withdrawn in lump sum.
Postponement of NPS account till 75 years
NPS account holders have been allowed to freeze their account till the age of 75 years.
Extension of online exit process for government sector
PFRDA has recently allowed online and paperless exit process for government sector subscribers. Earlier this process was allowed only for the non-government sector subscribers. The online exit process will be integrated with the instant bank account verification.
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