Simplifying the NPS Exit Process: A Step-by-Step Guide

Simplifying the NPS Exit Process: A Step-by-Step Guide
Tags: NPS Pension

The National Pension System (NPS) is a plan that provides a pension after retirement. Any employee can register and exit at their discretion.

 

In an emergency before retirement, up to 60% of the money in this fund may be withdrawn. If an employee does not choose to continue investing in this scheme, he can easily withdraw from it.

 

If you want to leave NPS, you have three alternative options. Typically, departure occurs when a person reaches the age of 60. The second option permits you to exit on your own before the completion of 60 years, and the third option allows you to exit if an account holder dies unexpectedly.

 

What are the exit rules from NPS?

After retirement, until 75, the subscriber can choose either a lump sum or an annual withdrawal, i.e., the pension option, to exit the NPS or both. They must abandon this arrangement after 75 years. However, the default method allows annual withdrawals of at least 40% of the deposit amount and the remaining 60% at the one-time withdrawal. At the same time, the customer can withdraw the entire amount once a year.

 

How to exit online?

You can opt out of NPS both offline and online. You can exit online by using an OTP or an e-signature. Customers can log in to the Central Record Keeping Agency (CRA) system and file an exit request using the online process, according to PFRDA. They must submit the details for the exit here.

 

Charges need to be paid for processing the request.

In this case, customers can select between a lump sum and an annual withdrawal. The customer must give information such as money allocation, Annuity Service Provider (ASP), Annuity Scheme, etc. KYC and other documents will also need to be uploaded.

 

POP then uses 'Instant Bank Account Verification' to validate the customer's bank account number and uploaded documents. The consumer must additionally pay its charges for this request to be processed. These fees are 0.125 percent of the entire fund and might range between Rs 125 and Rs 500.

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