Changes in NPS Rules: The Pension Fund Regulatory and Development Authority (PFRDA) has made it more attractive for subscribers to join the National Pension Scheme (NPS) after the age of 65 years. Under this, such people have been allowed to allocate up to 50 percent of their funds to equities or shares. Also, the exit rules have been eased for senior citizens.
After increasing the age of joining NPS from 65 to 70 years, PFRDA has revised the entry and exit rules. The age of entry in NPS has been revised from 18-65 to 18-70. According to the PFRDA’s circular on revised guidelines, any Indian citizen in the age group of 65-70 or Overseas Citizen of India (OCI) can join NPS. He can remain associated with this scheme till the age of 75 years.
Changes in NPS Rules
Under Auto Choice investment up to a maximum of 15 percent
The circular states that the subscribers who have closed their NPS account can also open a new account as per the norms of increase in age. PFRDA has said that if a subscriber joins NPS after the age of 65 years and decides to invest under the default auto choice, then he will be allowed to invest only up to 15 percent in shares.
60 percent of the lump sum amount can be withdrawn
For the subscribers joining the NPS after the age of 65 years, the circular states that they will be allowed to exit normally after three years. PFRDA said that the subscriber will have to use at least 40 percent of the fund for the purchase of ‘annuity’. The balance amount can be withdrawn in a lump sum.
The entire corpus can be withdrawn less than 5 lakhs.
If the subscriber’s fund is five lakhs or less then he can withdraw the entire added pension in a lump sum. PFRDA said that exit from NPS before three years will be treated as ‘premature exit’. In this, the subscriber will have to use at least 80 percent of the fund for ‘annuity’. If the subscriber wants to exit NPS prematurely and his corpus is less than Rs 2.5 lakh, he can withdraw the entire amount added in one go.