NPS withdrawal norms: Greater fund access comes with onus to manage risk

Systematic Unit Redemption offers market-linked returns and deferred tax payment, but does not guarantee pension for lifetime

The National Pension System (NPS) has undergone wide-ranging reforms that alter how investors accumulate, access, and manage retirement savings. The changes introduce greater flexibility and control but also place the onus on investors to manage longevity and inflation risks.

 

Lump-sum withdrawal raised to 80 per cent

 

Non-government subscribers can now withdraw up to 80 per cent of their retirement corpus as a lump sum at the age of 60, compared with 60 per cent earlier. Subscribers must use the remaining 20 per cent to purchase an annuity.

 

“The revised rule enhances liquidity at retirement by allowing greater access to funds.