{"id":258398,"date":"2023-09-02T19:17:36","date_gmt":"2023-09-02T13:47:36","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=258398"},"modified":"2023-10-08T14:17:18","modified_gmt":"2023-10-08T08:47:18","slug":"nps-withdrawal-options-set-to-be-eased-says-pfrda","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/nps-withdrawal-options-set-to-be-eased-says-pfrda\/","title":{"rendered":"NPS withdrawal options set to be eased, says PFRDA"},"content":{"rendered":"\n

Source: <\/b>The post is based on the article<\/span> \u201c<\/b>NPS withdrawal options set to be eased, says PFRDA<\/b>\u201d <\/b>\u00a0published in<\/span> The Hindu on 2nd September 2023<\/b><\/p>\n

What is the News?<\/b><\/h2>\n

Several state governments have opted out of the National Pension System (NPS) and switched back to the Old Pension Scheme which guarantees a monthly pension of 50% of the final salary for their employees.However, still these states continue to contribute to the NPS corpus.<\/span><\/p>\n

Currently, under NPS, S<\/span>tate government employees account for the largest chunk of the savings pool.<\/span><\/p>\n

What is the National Pension System(NPS)?<\/b><\/h2>\n

National Pension System (NPS) is being administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) set up under PFRDA Act, 2013.<\/span><\/p>\n

NPS is a market linked, defined contribution product.Under NPS, a unique Permanent Retirement Account Number (PRAN) is generated and maintained by the Central Recordkeeping Agency (CRA) for individual subscribers.<\/span><\/p>\n

NPS offers two types of accounts, namely Tier-I and Tier-II:<\/b> Tier-I account is the pension account having restricted withdrawals.\u00a0<\/span><\/p>\n

\u2013 Tier-II is a voluntary account which offers liquidity of investments and withdrawals.It is allowed only when there is an active Tier-I account in the name of the subscriber.The contributions accumulate over a period of time till retirement grows with market linked returns.<\/span><\/p>\n

\u2013 On exit\/retirement\/superannuation, a minimum of 40% of the corpus is mandatorily utilized to procure a pension for life by purchasing an annuity from a life insurance company and the balance corpus is paid as lump sum.<\/span><\/p>\n

NPS platform offers different models to suit the different segments of users. <\/b>These include :<\/span><\/p>\n

The Government model for the Central and State Government Employees<\/b>: NPS is mandatorily applicable on Central Government employees (except Armed Forces) recruited on or after 01.01.2004. Subsequently, all State Governments except a few states have also adopted NPS for their employees.\u00a0<\/span><\/p>\n

\u2013 Govt. employees make a monthly contribution at the rate of 10% of their salary and a matching contribution is paid by the Govt.For central Govt. employees, the employer\u2019s contribution rate has been enhanced to 14% from 01.04.2019.<\/span><\/p>\n

The Corporate Model: <\/b>Companies can adopt NPS for their employees with contribution rates as per the employment conditions.<\/span><\/p>\n

The All Citizens Model: <\/b>The All Citizens Model of the NPS allows all citizens of India aged between 18 – 65 years to join NPS on a voluntary basis.<\/span><\/p>\n

What are the changes PFRDA is planning to bring to NPS?<\/b><\/h2>\n

P<\/span>resently, on superannuation, members have to purchase an annuity with 40% of their accumulated retirement savings and withdraw the balance.<\/span><\/p>\n

Now, PFRDA is planning to allow members to opt for a systematic withdrawal plan for 60% of the corpus, by which they can choose to receive a fixed sum from their savings on a monthly, quarterly or half-yearly basis.<\/span><\/p>\n

Moreover, for the mandatory annuity purchases, members would be able to opt for a mix of schemes rather than a single scheme.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cNPS withdrawal options set to be eased, says PFRDA\u201d \u00a0published in The Hindu on 2nd September 2023 What is the News? Several state governments have opted out of the National Pension System (NPS) and switched back to the Old Pension Scheme which guarantees a monthly pension of… Continue reading NPS withdrawal options set to be eased, says PFRDA<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,956,9],"tags":[11872,10498],"class_list":["post-258398","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-schemes-and-programs","category-public","tag-9pm-daily-factly","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/258398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=258398"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/258398\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=258398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=258398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=258398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}