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The national Pension System was launched on 01-01-2004 with the objective of providing retirement income to all citizens. The Government has notified the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015. These regulations aim at providing an effective mechanism, upon exit or withdrawal from the National Pension System, including the conditions, purpose, frequency and limits for withdrawals from individual pension account, as also the conditions, subject to which a subscriber shall exit from the National Pension System and purchase an annuity thereupon. The Key features of the regulations are as under:

Purposes for which withdrawals can be made under National Pension System

Subscribers can withdraw up to 25% of their own contributions to individual pension account, for any of the following purposes only:-
(a) for Higher education of his or her children including a legally adopted child
(b) for the marriage of his or her children, including a legally adopted child;
(c) for the purchase/construction of a residential house/flat in own/joint name with spouse provided that subscriber does not owns either individually or jointly any residential house/flat,other than ancestral property.
(d) for treatment of specified illnesses of subscriber, his/her spouse, children, including a legally adopted child or dependent parents which shall comprise of hospitalization and treatment.

Conditions of Withdrawals:

(a) the subscriber shall have been in the National Pension System at least for a period of last ten years from the date of his or her joining;
(b) the subscriber shall be permitted to withdraw accumulations not exceeding twenty-five per cent of the contributions made by him or her and standing to his or her credit in his or her individual pension account, as on the date of application for withdrawal

Frequency of Withdrawals:

Frequency: the subscriber shall be allowed to withdraw only a maximum of three times during the entire tenure of subscription under the National Pension System and not less than a period of five years shall have elapsed from the last date of each of such withdrawal. The mandatory requirement of five years having elapsed between two withdrawals shall not apply in case of “treatment for specified illnesses or in case of withdrawal arising out of exit from National Pension System due to the death of the subscriber.

Payment Ceiling Limit on Exit from National Pension System (NPS)

The subscribers have been categorized as, (1) Government sector, (2) All citizens including corporate sector and (3) NPS-Lite and Swavalamban subscribers. The exit regulations applies accordingly to the category of the subscribers.

	Retirement upon attaining the age of superannuation/60 Years	Voluntary retirement/before the age of 60 years	Death before attaining the age of superannuation/60 Years
(A) For Government Sector employee	40% to be mandatorily utilised for purchase of annuity. Balance to be paid	80% to be mandatorily utilised for purchase of annuity. Balance to be paid	100% to be paid to the nominee(s) or legal heirs.
(B) All Citizens, including corporate sector subscribers	40% to be mandatorily utilised for purchase of annuity. Balance to be paid	80% to be mandatorily utilised for purchase of annuity. Balance to be paid	100% to be paid to the nominee(s) or legal heirs.
(C) Lite and Swavalamban subscribers	40% to be mandatorily utilised for purchase of annuity. Balance to be paid	80% to be mandatorily utilised for purchase of annuity. Balance to be paid	100% to be paid to the nominee(s) or legal heirs.

Note: Where the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than a sum of two lakh rupees, the subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing annuity and upon such exercise of this option, the right of such subscriber to receive any pension or other amount under the National Pension System or from the government shall extinguish.

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PFRDA-Exits Withdrawals under National Pension System Regulations 2015. Conditions, Purpose, Frequency, withdrawals Limits Pension Account | 08-06-2015 |