Partial Withdrawal Under NPS for Illness
If you are considering a partial withdrawal from the National Pension System (NPS), there are several important steps you need to take. First, you will need to gather all of the necessary documentation, including your National Pension System account number and your permanent account number (PAN). Once you have all of the necessary documents, you can then submit a formal request for partial withdrawal from the NPS. This request will need to include details on the amount you wish to withdraw, the reason for the withdrawal, and any other relevant information. Once your request has been reviewed and approved, you will be able to access the funds you have withdrawn from your NPS account.
Partial withdrawal from National Pension System (NPS) – Documentation and Formal Request
Permission of partial withdrawals towards the treatment of specified illnesses is a provision offered by some insurance policies that allows policyholders to withdraw a part of their insurance coverage for the treatment of specific illnesses. This provision can be a crucial financial lifeline for those who need treatment for long-term illnesses such as cancer or heart disease, which can be financially draining. With this provision, policyholders can access their insurance coverage in small amounts, which can be used to pay for treatment expenses, including hospitalization, medication, and doctor fees.
PENSION FUND REGULATORY
AND DEVELOPMENT AUTHORITY
B-14/A, Chhatrapati Shivaji Bhawan,
Qutab Institutional Area,
Katwaria Sarai, New Delhi-110016
Circular
Circular No. PFRDA/2020/7/REG-EXIT/1.
Date: 09.04.2020
To,
All Stakeholders and subscribers under National Pension System (NPS).
SUBJECT: Permission of Partial withdrawals towards treatment of specified illnesses.
In continuation of the circular no. PFRDA/2018/47/Reg-Exit/4 dated 24.05.2018, issued on the applicability & handling of partial withdrawals, Authority is issuing this circular referring the terms of sub-regulation 8(1)(A)(d)(xv) of PFRDA (Exits and withdrawals under NPS) Regulations, 2015 and amendments thereunder, prescribes that-
(a). In view of the decision of Government of India, which has declared COVID-19 as a pandemic, It has been decided to declare “COVID-19” as a critical illness which is life threatening in nature.
Hence, in view of the above, the partial withdrawals shall be permitted to fulfil financial needs of the subscribers, if required to him/her against the request placed for partial withdrawals towards treatment of illness of subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents as mentioned in regulation 8(1)(A)(d) of the said regulations.
(b). The other terms and conditions as prescribed under regulation 8 of the PFRDA (Exits and withdrawals under NPS) Regulations, 2015 and amendments thereto shall continue to be applicable regarding defining of limits and frequencies.
(c). Documentation
The Nodal Office/PoPs/Aggregators would ensure that the subscriber has provided the following document before authorising partial withdrawals.-
(1). Medical Certificate
(2). Formal request for partial withdrawal.
sd/-
Vikas Kumar Singh
General Manager
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NPS stands for National Pension System, which is a voluntary and contributory retirement savings scheme.
Partial withdrawal under NPS for specified illness allows subscribers to withdraw a part of their accumulated pension wealth in certain situations of specified illnesses or medical treatments.
Subscribers who have been enrolled in the NPS for at least 3 years and have a balance in their Tier-I account are eligible for partial withdrawal for specified illness.
The specified illnesses covered under this scheme include cancer, kidney failure, major organ transplant, and heart-related ailments, among others.
Subscribers can withdraw up to 25% of their own contributions for treatment of specified illnesses.
Yes, subscribers can make a maximum of 3 partial withdrawals for specified illness, with a minimum gap of 5 years between each withdrawal.
Subscribers need to submit a withdrawal request along with relevant medical documents and forms to their NPS account provider.
No, the withdrawn amount for specified illness is tax-free.
Yes, the withdrawn amount will reduce the subscriber’s pension account balance, and the monthly pension amount will be recalculated accordingly.
No, the withdrawn amount can only be used for medical treatment of specified illnesses and cannot be utilized for any other purpose.
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