Getty ImagesCurrently if a National Pension System (NPS) subscriber exits his/her investment prematurely or if their PRAN has been deactivated due to final exit, they will have to open a new NPS account (with new PRAN) if they are eligible to join back. However, now the Pension Fund Regulatory Authority (PFRDA) has given NPS subscribers two options to rejoin the scheme.
According to the PFRDA press release issued on September 23, 2020, these are the two option now available with subscribers to rejoin NPS, who exited prematurely:
What is PRAN?
Under NPS, each subscriber is allotted a Permanent Retirement Account Number or PRAN, which is unique to them. One subscriber can have only one active PRAN at any given point of time. Hence, an eligible subscriber can open a new NPS account after closing their existing NPS account up to the age of 65 years.
How NPS subscribers can rejoin NPS using same PRAN
According to the PFRDA release, issued on September 23, 2020, "Under NPS, a subscriber can opt to either prematurely exit or opt for final exit at the age of 60 years or on attaining superannuation or any time later as per regulations. In case of premature exit, up to 20% of the accumulated pension corpus in the PRAN can be withdrawn as lump sum and balance (80% or above) has to be utilized to buy annuity plan from an Annuity Service Providers (ASP) empaneled by PFRDA."
PFRDA said that there have been instances when NPS subscribers, including government employees who have applied for premature exit, who have withdrawn a lump sum (up to 20 per cent) from their PRAN but have yet not bought any annuity plan. In such cases, 80 per cent or more of the corpus meant for annuity remains invested in their PRAN.
To help such subscribers, PFRDA has decided that they will be allowed to continue in NPS by redepositing the entire amount withdrawn earlier (up to 20 per cent) in one lump sum into their NPS account (PRAN) and will have the option to continue their NPS account with the same PRAN. This option can be exercised only once, as per the release.
However, in case of difficulties to redeposit the amount withdrawn earlier, subscribers can also opt to close their NPS account by availing annuity out of the remaining corpus (80 per cent) and open a new NPS account by completing the required formalities, stated PFRDA.
According to the PFRDA press release issued on September 23, 2020, these are the two option now available with subscribers to rejoin NPS, who exited prematurely:
- Subscribers can open a new NPS account with a new PRAN, if they are otherwise eligible to join NPS.
- Subscribers can continue in NPS with the same PRAN by redepositing the amount withdrawn earlier (up to 20 per cent) into their NPS account (same PRAN). However, this option of redeposit to continue the existing PRAN can be availed only once.
What is PRAN?
Under NPS, each subscriber is allotted a Permanent Retirement Account Number or PRAN, which is unique to them. One subscriber can have only one active PRAN at any given point of time. Hence, an eligible subscriber can open a new NPS account after closing their existing NPS account up to the age of 65 years.
How NPS subscribers can rejoin NPS using same PRAN
According to the PFRDA release, issued on September 23, 2020, "Under NPS, a subscriber can opt to either prematurely exit or opt for final exit at the age of 60 years or on attaining superannuation or any time later as per regulations. In case of premature exit, up to 20% of the accumulated pension corpus in the PRAN can be withdrawn as lump sum and balance (80% or above) has to be utilized to buy annuity plan from an Annuity Service Providers (ASP) empaneled by PFRDA."
PFRDA said that there have been instances when NPS subscribers, including government employees who have applied for premature exit, who have withdrawn a lump sum (up to 20 per cent) from their PRAN but have yet not bought any annuity plan. In such cases, 80 per cent or more of the corpus meant for annuity remains invested in their PRAN.
To help such subscribers, PFRDA has decided that they will be allowed to continue in NPS by redepositing the entire amount withdrawn earlier (up to 20 per cent) in one lump sum into their NPS account (PRAN) and will have the option to continue their NPS account with the same PRAN. This option can be exercised only once, as per the release.
However, in case of difficulties to redeposit the amount withdrawn earlier, subscribers can also opt to close their NPS account by availing annuity out of the remaining corpus (80 per cent) and open a new NPS account by completing the required formalities, stated PFRDA.