 "Pension, NPS")
The Pension Fund Regulatory and Development Authority (PFRDA) is going to make some changes to the National Pension Scheme (NPS) Rules. PFRDA has started the implementation process, and the addition of new rules aims to make it easy and beneficial for the employees under these new rules to withdraw money.
The circulation was issued on October 27, 2023, by the PFRDA to alter Rule 3 and Rule 4 and will start Systematic Lump Sum Withdrawal (SLW) for withdrawal of money after the stipulated time. These new rules will allow the NPS account holder to withdraw up to 60 per cent of the money from the deposited pension fund. Under SLW, the user can withdraw the deposited money on a monthly, quarterly, half-yearly or even yearly basis till the age of 75 years as per their convenience.
What is SLW?
SLW for NPS will work as a Systematic Withdrawal Plan (SWP) for mutual fund users. People who come under the purview of NPS will be able to withdraw money within a time interval of their choice. The account holder can choose whatever option he wants to choose from the 40 per cent fund after reaching the age of 60, the employee will be able to continue till the age of 75 years.
This scheme will allow pensioners to continuously receive money. This scheme will ensure that the NPS account holder will not be burdened with expenses and will receive a fixed income post-retirement. However, the account holder will get the opportunity to choose the option once.
How will NPS work?
The National Pension Scheme is an Indian government program that operates under the supervision of PFRDA. NPS invest money in different places like equities, government securities and corporate bonds. It helps NPS to keep strengthening its retirement fund.
Who will benefit from SLW?
The SLW scheme of NPS will benefit those who want a fixed income even post-retirement. The SLW benefit can be availed at the time of retirement.
