Subscribers to the National Pension System (NPS), who are employees of the central and state government and central autonomous bodies will be no longer allowed to partially withdraw from their NPS account through self-declaration.
This follows a circular released by the Pension Fund Regulatory Development Authority (PFRDA) on December 23, 2022. Now, it has been made mandatory for all government sector subscribers to submit their partial withdrawal requests through their associated nodal offices.
During the Covid pandemic, the pension fund regulator had allowed government sector subscribers to make partial withdrawals from NPS accounts through self-declaration. The decision comes at a time when several states have requested the regulator to refund the corpus of their employees. The states want to re-implement the old pension scheme (OPS).
The PFRDA said in its circular: “With the abating of the pandemic-related difficulties relaxation of lockdown restrictions, the issue examined after taking into consideration of the prevalent practices, circumstances and law, it has been decided to make it mandatory for all the government sector subscribers (central/state govt and central/state autonomous bodies) to submit their requests through their associated nodal offices.”
In January 2021, PFRDA, had issued a circular, where it had allowed partial withdrawals under NPS through self-declaration for the benefit of subscribers as a special dispensation to cope with the Covid pandemic in order to protect the subscribers’ interest and ease the burden of nodal officers, including POPs from verification and authorization.
However, there is no change in rule for partial withdrawal facility through self-declaration for voluntary non-government subscribers.
“The subscribers belonging to the voluntary segment of the NPS (All citizens and corporate) may continue to use the process as mentioned in the cited circular,” the regulator said.
For partial withdrawal, the following conditions need to be fulfilled, according to Protean, eGov Technologies Limited website, a central recordkeeping agency (CRA):
- Subscriber should be in NPS at least for three years
- The withdrawal amount should not exceed 25 per cent of the contributions made by the NPS subscriber
- PFRDA allows a maximum of three partial withdrawals during the entire tenure of the NPS subscription
- Withdrawal is allowed only against specified reasons, namely
Higher education of children
Marriage of children
For the purchase/construction of a residential house (in specified conditions)
For treatment of critical illnesses
