NPS: Ambit of reasons for withdrawal expanded; use facility cautiously

Withdrawal made during tenure for other goals will erode retirement corpus

The Pension Fund Regulatory and Development Authority (PFRDA) came out with a master circular on January 12 regarding the new rules that will govern partial withdrawal from the National Pension System (NPS). These rules will come into force on February 1.

Current rules

A subscriber can withdraw a part of their NPS corpus before retirement. Up to 25 per cent of the amount accumulated can be withdrawn. Here the amount accumulated refers to the employee’s contribution. Withdrawal cannot be made from the portion of the corpus contributed by the employer.

Subscribers can only make a partial withdrawal after having completed three years in