• Pension Fund Regulatory and Development Authority (PFRDA) has reformed the rules for withdrawal of National pension system (NPS) subscribers.
  • This was done to facilitate the subscriber’s sudden financial needs. For the partial withdrawal facility, the minimum period under the NPS has been reduced from 10 years to 3 years (the date of joining w.e.f. 10th August 2017).
  • The minimum time gap between the two withdrawal has also been removed.
  • Three partial withdrawal is approved for a subscriber under NPS, but each withdrawal should not exceed 25% of the subscriber contribution excluding the employer contributions. These norm changes are applicable for Tier-I account of the subscriber and there is no restriction on withdrawal for the Tire- II.

The purpose for the partial withdrawals that are permitted for Tire- I account

  1. Children Higher education or Marriage including legally adopted child
  2. Purchase/ Construction of residence (House/ Flats) under the subscriber’s name or the in-joint with the spouse. If the subscriber already owns a residential property under their name or jointly with their spouse other than ancestral property, then the withdrawal will not be permitted.
  3. If the subscriber/ legal spouse / Children (including legally adopted) / Dependent parents suffering from the specified illness with the need for hospitalization and treatment then the withdrawal is permitted. The specified illness includes:

Cancer, Kidney Failure (End Stage Renal Failure), Primary Pulmonary Arterial Hypertension, Multiple Sclerosis, Major Organ Transplant, Coronary Artery Bypass Graft, Aorta Graft Surgery, Heart Valve Surgery, Stroke, Myocardial Infarction, Coma, Total blindness, Paralysis, Accident of serious/ life-threatening nature.

  1. The financial need for skill development/re-skilling/self-development activities
  2. For the establishment of own venture/ startup
  3. Medical other expenses for disability or incapacitation suffered.

Limits applied to withdrawal

  1. At least a period of three years must be passed from the date of joining of the subscriber to the NPS
  2. 25% of subscriber’s contribution/ subscriber’s standing account/ individual pension account accumulation can be withdrawn as on the application withdrawal date

Frequency of withdrawal

Three partial account withdrawal is permitted during the entire tenure of NPS subscription without any restriction on time gap between the withdrawal.