The Pension Fund Regulatory and Development Authority (PFRDA) increased the maximum age for joining the National Pension System (NPS) from 65 years to 70 years of age. Following the change in age, the NPS has revised the guidelines on entry and exit options.
- The existing age of entry which is 18-65 years were revised to 18-70 years.
Who is eligible to join NPS after 65 years?
i.Any Indian Citizen, resident or non-resident and Overseas Citizen of India (OCI) between the age of 65-70 years are eligible to join NPS and continue their NPS Account up to the age of 75 years.
ii.Those Subscribers who have closed their NPS Accounts are also permitted to open a new NPS Account as per increased age eligibility norms.
Revised Guidelines for the Customers joining NPS beyond the age of 65 years:
i.Choice of PF and Asset Allocation:
The customers could exercise the choice of Pension Fund (PF) and Asset Allocation with the maximum equity exposure of 15 percent and 50 percent under Auto and Active Choice respectively.
ii.Exit Option:
If the corpus is equal to or less than ₹5.00 lakh
| Type of Exit | Maximum % of Amount could be Withdrawn as Lump Sum | Minimum % of Amount should be used for Annuity Purchase |
|---|---|---|
| Normal Exit (i.e exit after 3 years) | 60% | 40% |
| Normal Exit-If the corpus is equal to or less than ₹5.00 lakh | the Subscriber may opt to withdraw the entire accumulated pension wealth in lump sum. | |
| Premature Exit (i.e.Exit before completion of 3 years) | 20% | 80% |
| Premature Exit-If the corpus is equal to or less than ₹2.5 lakh | the Subscriber may opt to withdraw the entire accumulated pension wealth in lump sum. | |
| Unfortunate Death of the Subscriber | Entire corpus payable to the nominee as a lump sum | |
Note – Annuity is the monthly payment that will be received by the subscriber from the Annuity Service Provider after their exit from NPS.
iii.NPS Tier II Account:
The Subscribers are also made eligible to open Tier II Accounts for investing their disposable income to optimize their returns.
- Tier-II savings account is a voluntary savings facility, which enables the customers to withdraw their savings anytime.
Note – Tier-I Account is a non-withdrawable pension account that could be used to save for retirement.
The new guidelines are issued under Section 14 of the PFRDA Act 2013.
Recent Related News:
In July 2021, the PFRDA made amendments to the PFRDA (Pension Fund) Regulations, 2015 and modified the Foreign Direct Investment (FDI) limit in the pension fund management under the National Pension System (NPS) to 74 percent from 49 percent.
About Pension Fund Regulatory and Development Authority (PFRDA):
Establishment – 2003
Headquarters – New Delhi
Chairperson – Supratim Bandyopadhyay
