The Pension Fund Regulatory and Development Authority (PFRDA) is all set to revamp the protocols surrounding the National Pension Scheme. The intention behind this mammoth task is to refine the withdrawal procedure, thereby widening its reach to an extensive population
Redesigning Pension Withdrawals: A More Systematic Approach
In a move that would drastically reshape the current system, PFRDA plans to enable a more structured method for pension withdrawals. Under the newly proposed idea, subscribers will have the flexibility to steadily extract up to 60% of their amassed corpus. The motivation behind this transition is to uncomplicate the withdrawal procedure, making it more accessible for a larger populace.
Deciphering the New Proposal and Its Potential Impact
Under the new blueprint, National Pension Scheme (NPS) subscribers will be permitted to methodically withdraw up to 60% of their corpus following retirement until the age of 75. This presents a significant shift from the current one-time withdrawal approach. However, the remaining 40% will still have to be invested in an annuity. This proposed transformation aims to provide subscribers with enhanced control over their post-retirement funds.
Projected Timeline and Foreseen Influence
The PFRDA chairperson, Deepak Mohanty, mentioned that the execution of this systematic withdrawal scheme is projected to begin during the latter half of the ongoing fiscal year. The specifics of the amount to be withdrawn will be at the discretion of the customers, with the frequency of withdrawals ranging from monthly to yearly. This adaptation holds particular importance for individuals between the ages of 60 to 75.
Presently, the NPS anticipates a surge in fresh subscribers from the non-government sector, expecting a rise from one million in the previous year to 1.3 million in the current fiscal. With the total number of NPS subscribers last year being 12 million, expectations for this year are set at 13 million. Meanwhile, the Atal Pension Scheme has already seen a whopping 54 million subscribers.
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