Ministry of Finance
Withdrawal from New
Pension Scheme
Posted On: 08 JAN 2019 5:29PM by PIB Delhi
Government has allowed premature withdrawal from New Pension
Scheme Fund. A subscriber is eligible for three partial withdrawals during the
period of subscription under National Pension System (NPS), each withdrawal not
exceeding twenty-five percent of the contributions made by the subscriber and
excluding contributions made by the employer. There is, however, no restriction
on withdrawals from the Tier-II account of the subscriber. Further, keeping in
view the possibility of sudden financial needs of the subscribers, the
requirement of minimum period under National Pension System (NPS) for availing
the facility of partial withdrawal from the mandatory Tier-I account of the
subscriber has been reduced from 10 years to 3 years from the date of joining
w.e.f. 10th August, 2017. The minimum gap of 5 years between two partial
withdrawals has also been removed w.e.f. 10th August, 2017.
On 06.12.2018, Government has approved the following proposals
pertaining to choice of Pension Fund and investment pattern for Central
Government subscribers under NPS:
·
Choice
of Pension Fund: Central Government subscribers will be allowed to choose any
one of the pension funds including Private sector pension funds. They
could change their option once in a year. However, the current provision of
combination of the Public-Sector Pension Funds will be available as the default
option for both existing as well as new Government subscribers.
·
Choice
of Investment Pattern: The following options for investment choices will be
offered to Central Government employees:
- Government employees who prefer a fixed return with minimum amount of risk may be given an option to invest 100% of the funds in Government securities (Scheme G).
- Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes.
o Conservative Life Cycle Fund with maximum
exposure to equity capped at 25% at the age of 35 years and tapering off
thereafter (LC-25).
o Moderate Life Cycle Fund with maximum exposure
to equity capped at 50% at the age of 35 years and tapering off thereafter
(LC-50).
In case an employee does not submit any choice, the existing
allocation of funds shall continue as the default option.
This was stated by Shri Shiv Pratap Shukla, Minister of State
for Finance in written reply to a question in Rajya Sabha today.
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