The New NPS Withdrawal Rule is changed. What are the new changes? Here is everything you need to know

The changes in the New NPS withdrawal rule have been implemented by the PFRDA (Pension Fund Regulatory and Development Authority). One of these changes allows for phased withdrawal of the lump sum. Moreover, the "penny drop" verification has also been made mandatory for the National Pension System (NPS) fund withdrawals by the PFRDA.

The new withdrawal rule changes

• First things first, the PFRDA has offered the facility of SLW (Systematic Lump Sum Withdrawal) for the NPS subscribers. The facility is proposed to offer the option of phase withdrawal of the lump sum via a Systematic Lump Sum Withdrawal facility, as stated in a circular by the PFRDA.
• Secondly, the new changes allow the NPS subscribers to withdraw up to 60 percent of the pension corpus via the SLW on a quarterly, monthly, annually, or even half-yearly basis for some time till the age of 75 according to the choice during their normal exit.
• Penny drop verification has also been mandatory for the NPS subscribers' withdrawal of funds.
• Additionally, the penny drop verification has to be successful with name matching for processing the withdrawal/exit requests. This is necessary also in the case of modifying the bank account details of the subscribers.

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• Moreover, instant bank account verification has been made mandatory for exiting the NPS scheme and advance withdrawals as of October 25, 2023.
•  In case the Central Record Keeping Agency (CRA) does not succeed in penny-drop verification, the relevant nodal office will be involved to rectify the bank account information of the subscriber, as said by the pension regulator.
• In case of verification failures, the subscribers are going to be promptly informed via email and mobile, with guidance to reach out to the POP or nodal officer for resolution.
• Moreover, "no request" for withdrawal/exit and modification of the bank account details of the subscriber is going to be permitted in situations of penny drop verification by the CRA, as stated by the circular.
• The provisions are also going to be applied across Atal Pension Yojana, NPS Lite, and NPS for all forms of withdrawals/ exits along with modification of the bank account details of the subscribers.
• The withdrawal limits of the NPS remain untouched. Subscribers who hold a total interest and deposit of an amount less than Rs.5 lakh can withdraw the complete amount at once if they wish. In case the subscriber has an amount that exceeds this limit, the subscriber can make use of 40 percent of it for the purpose of regular payments over time. The other 60 percent of the amount can be taken out all at once. 

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