Curated By: Business Desk
Last Updated: October 31, 2023, 20:24 IST
Subscribers can withdraw as much as 60% of their NPS maturity quantity by way of Systematic Lumpsum Withdrawal (SLW).
The Systematic Lump sum Withdrawal plan in NPS investments permits the buyers to withdraw as much as 60% of the corpus fund in instalments till they flip 75.
The Pension Fund Regulatory and Development Authority (PFRDA) has not too long ago proposed the introduction of Systematic Lump sum Withdrawal (LSW) facility, permitting subscribers to obtain periodic payouts as an alternative of withdrawing the quantity at one go from their investments within the National Pension System (NPS). As per the revised guidelines, subscribers can withdraw as much as 60% of their NPS maturity quantity by way of Systematic Lumpsum Withdrawal (SLW), in instalments till they attain the age of 75 years.
The subscribers can go for month-to-month, quarterly, half-yearly and yearly payouts. On choosing annual payouts the NPS subscriber must submit the withdrawal request every time and authorise it.
PFRDA has requested the NPS authorities to tell all of the buyers nearing the age of 60 years or keen to exit the scheme in regards to the new SLW facility. The Central Record Keeping Agencies (CRAs), chargeable for managing KYC associated processes for NPS investments, have been urged by PFRDA to replace the subscribers in regards to the new initiative.
On October 27, 2023, a round issued by PFRDA laid out the small print of this new lump sum withdrawal choice. So far, the buyers have been allowed to withdraw 60% of their NPS corpus fund as a lump sum on maturity.
Advantages of SLW
SLW has a number of benefits because it generates constant money flows, brings in extra earnings when mixed with annuity, supplies a way to creating wealth, and in addition affords tax advantages for all such withdrawals. The NPS subscribers may also be free to pick out the lump sum with systematic withdrawal for roughly 60% of their corpus fund whereas 40% will probably be used to buy annuity choices. The annuity buy rule will stay unchanged, in accordance with PFRDA.
The National Pension System (NPS) is a voluntary retirement scheme whereby one makes month-to-month contributions to their NPS Tier I or Tier II accounts to safe their non-working years. The quantity contributed additionally earns curiosity on a month-to-month foundation. The NPS rate of interest typically ranges between 9% and 12%, which is calculated on a compounding foundation that finally results in constructing a big corpus.
