Partial Withdrawals Permitted; Withdrawal Limit Increased to 75% for Certain Cases
New Delhi:
In a major relief to National Pension System (NPS) subscribers, the Central Government has announced important changes in the withdrawal rules, allowing pension holders to withdraw up to 60% of their accumulated NPS corpus. This move is expected to provide greater financial flexibility to government employees and other NPS subscribers.
According to the revised rules, subscribers can now withdraw a substantial portion of their pension savings during their service period, subject to specific conditions.
Key Changes in NPS Withdrawal Rules
Under the updated guidelines:
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Up to 60% of the total NPS corpus can now be withdrawn
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Earlier, partial withdrawals were more restrictive
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The withdrawal limit in special circumstances has been increased up to 75%
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These changes apply to both government and non-government NPS subscribers
The decision has been taken to address long-standing demands from employees seeking greater liquidity from their pension funds.
Purpose of Withdrawal
The revised rules allow withdrawals for specific purposes, including:
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Medical treatment
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Higher education of children
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Marriage expenses
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Construction or purchase of a house
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Other urgent personal needs
The government clarified that withdrawals are permitted only for genuine and specified reasons, ensuring that the core objective of retirement security remains protected.
What Has Changed Compared to Earlier Rules?
Previously, NPS subscribers could withdraw only a limited portion of their accumulated funds and that too under strict conditions. With the new changes:
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The withdrawable percentage has been increased
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Subscribers can access funds more easily during their service period
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The number of permitted withdrawals has also been made more flexible
Officials stated that the amendments strike a balance between retirement security and present-day financial needs.
Impact on Government Employees
Government employees enrolled under NPS will benefit significantly from this decision. Many employees had raised concerns that earlier withdrawal limits did not adequately address emergencies or life events.
The revised rules are expected to improve confidence in the NPS framework and encourage greater participation.
Safeguards for Pension Security
Despite the increased withdrawal limits, the government has ensured that a portion of the pension corpus remains locked in to provide mandatory annuity benefits after retirement. This ensures financial stability for retirees.
Implementation
The new rules will come into effect immediately following official notification. Pension fund regulatory authorities have been instructed to update systems and inform subscribers about the revised norms.
Conclusion
The enhancement of withdrawal limits under the National Pension System marks a significant policy shift aimed at making pension savings more accessible while safeguarding long-term retirement benefits. The move is expected to benefit millions of NPS subscribers across the country.
