How Systematic Lumpsum Withdrawal Option Work: NPS Systematic Withdrawal feature will allow NPS investors to opt for periodic withdrawals on monthly, quarterly, half-yearly or yearly basis till the age of 75 instead of 60.
New Delhi: NPS investors are going to have the option of Systematic Lumpsum Withdrawal (SLW) or Periodic Withdrawal for withdrawal at the time of retirement. The Systematic Withdrawal feature will allow NPS subscribers to opt for periodic withdrawals on monthly, quarterly, half-yearly or yearly basis till the age of 75 years. With this, this amount can be used to meet financial needs or expenses after retirement. Whereas, according to the current rules, at the age of 60, the option of withdrawing a lump sum amount is available on retirement.
How will the Systematic Lumpsum Withdrawal option work?
As per PFRDA, NPS investors have to make a one time request through online or offline mode to activate this Systematic Lumpsum Payment option. NPS investors have to mention the amount, start date, end date while making the request. But, do note that once the Systematic Lumpsum Withdrawal option is activated, the NPS subscriber cannot make any further contributions.
Will have to tell in the application when and how much the amount is wanted
NPS investors have to mandatorily specify the number of units or the amount at which intervals they want to withdraw while requesting for Systematic Lumpsum Withdrawal. The balance amount after each payment will remain invested in NPS. As per the pension fund regulator, this option allows subscribers to get market linked investment returns for the amount not withdrawn.
At the time of exit, customers will have multiple withdrawal options, such as lump sum withdrawal, systematic lump sum withdrawal and continuation option. PFRDA has said that the option of periodic systematic lump sum withdrawal through automation will be flexible in the process and conducive to retirement benefits.
Annuity purchase rule will remain the same
NPS subscribers will have the option to opt for the Systematic Lumpsum Withdrawal option for the 60% lumpsum component. The remaining 40 percent amount will be used to buy annuity. Annuity purchase rules will be the same as before.
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