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5 recent NPS changes you should know

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The Pension Fund Regulatory and Development Authority (PFRDA) has recently made some changes to the NPS system, which includes new exit and withdrawal rules.

5 recent NPS changes you should know
National Pension System or NPS, a government-run investment scheme, gives the subscriber the option to set the preferred allocation to different asset classes. The Pension Fund Regulatory and Development Authority (PFRDA) has recently made some changes to the NPS system, which includes new exit and withdrawal rules.
Here are the significant changes one should know:
Withdrawal of full contributions in one go
NPS subscribers can withdraw the full contributions in one go without purchasing an annuity if the pension corpus is equal to or less than Rs 5 lakh. In simple words, this means that subscribers can withdraw their entire money at one go if the pension corpus is up to Rs 5 lakh.
The increased threshold, according to Rachit Chawla, CEO and Founder of Finway FSC, will offer more liquidity in the hands of the investors. Also, they could invest the withdrawn money into other investment avenues to earn better returns.
Entry and exit ages
The PFRDA has increased the maximum age of entry into the NPS from 65 to 70. The exit age limit has also been extended to 75 years.
Annuity deferment
The subscribers now have the option to defer the purchase of an annuity for a maximum period of three years, from the date of attainment of sixty years of age or the age of superannuation, as the case may be, provided the subscriber intimates his or her intention to do so in writing in the specified form at least fifteen days before the attainment of the age of sixty years or the age of superannuation to the NPS Trust or any intermediary or other entity authorized for this purpose.
According to PFRDA, it will be a condition precedent to opt for such deferment of annuity purchase, that in case if the death of the subscriber occurs before such due date of purchase of an annuity after the deferment, then the entire accumulated pension wealth of the subscriber shall be paid to the nominee(s) or legal heir(s), as the case may be, of such subscriber.
Extension on account of minimum age
If the accumulated pension wealth of the subscriber is more than Rs 2.5 lakh or a limit to be specified by the Authority for the purpose, but the age of the subscriber is less than the minimum age required for purchasing any annuity, such subscriber will continue to be subscribed to the NPS, until he or she attains the age of eligibility for purchase of an annuity.
However, in such cases, if the accumulated pension wealth of the subscriber is equal to or less than Rs 2.5 lakh, such subscribers will have the option to withdraw the entire accumulated pension wealth without purchasing any annuity.
Premature withdrawal limit increase
In a gazette notification, the pension regulator has also stated that the premature withdrawal limit on a lumpsum basis for NPS has been increased to Rs 2.5 lakh from Rs 1 lakh.
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