Pension regulator PFRDA has proposed allowing the National Pension System subscribers to withdraw up to 25 % of accumulated funds for medical expenses, higher education, marriage and house purchase. The “partial withdrawal” will be allowed only after 10 years of contribution, say the draft guidelines by the Pension Fund Regulatory and Development Authority (PFRDA).
The withdrawal will be treated as partial withdrawal not exceeding 25% of the contribution made by the subscriber. Currently, partial withdrawals are not permitted and a subscriber has to completely exit the scheme for withdrawal before maturity. NPS is a long-term, retirement savings plan which accumulates and generates a pension post-retirement. It is mandatory for all central government employees who joined their jobs after January, 2004 and is open to other citizens also.
The guidelines recommend that the subscriber may be allowed to withdraw a maximum of 3 times by keeping a gap of at least 5 years between two withdrawals. The guidelines have been made public for wider discussions and comments.