NPS UPDATE! Know 5 BIG changes in National Pension System; All benefits, relaxations details here

The National Pension System (NPS) is a government offered retirement cum pension scheme. By investing in NPS, the investors get the dual benefit of tax-saving and retirement planning. Contribution towards an NPS account provides a benefit to individuals by way of a deduction under Section 80C.  Not just it secures your retirement planning, but it also saves taxes of up to Rs 1,50,000 a year. The best part is both private and government employees can invest in this retirement planning scheme. In recent months there have been few changes by the Pension Fund Regulatory and Development Authority (PFRDA) in NPS. Let’s see what are these major changes; 

1) Transaction in NPS via NACH mandate  

PFRDA has enabled the National Automated Clearing House (NACH) mandate in NPS transaction in order to curb the existing challenges in fund transfer process. With the help of the NACH mandate, the complete transaction process will become digital for Point of Presence (PoP) and other NPS distributors. PFRDA introduced NACH mandate jointly by Trustee Bank and Central Record Keeping through National Automated Clearing House operated by National Payments Corporation of India.

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2) Withdraw Entire Accumulated Pension Wealth 

Now on maturity, the PFRDA has allowed NPS subscribers to withdraw the entire accumulated pension wealth without purchasing annuity if the pension amount is less than Rs 5 lakh. Currently, the person can withdraw up to 60 per cent of the amount accumulated in the account, while the rest 40 per cent is used to purchase an annuity plan. 

3) Relaxation in timelines  

PFRDA has relaxed timelines for activities under NPS and NPS Lite- Swavalamban scheme amid the second wave of the COVID pandemic. Point of Presence (POPs) are advised to undertake NPS related activities within prescribed Turn Around Time (TAT) under the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018, and guidelines issued there-under, in order to ensure timely and efficient service to subscribers, this the pension regulator mentioned. 

4) Partial Withdrawal via self-declaration 

In order to ease the process of partial withdrawal and make it simple, online and paperless in the of the NPS subscribers, it was decided to allow them the partial withdrawal based on self-declaration and thereby doing away with the submission of supporting documents to substantiate the reason for partial withdrawal.  

5) Deposit contributions under D Remit 

National Pension System (NPS) subscribers can deposit contributions into their accounts under D Remit (or direct remittance) using IMPS. The pension regulatory said, "PFRDA is pleased to announce the enablement of contribution by subscribers into D Remit by using Immediate Payment System (IMPS), the instant fund transfer facility provided by National Payment Corporation of India (NPCI).