This is great news for working professionals and those planning for retirement. The Pension Fund Regulatory and Development Authority (PFRDA) has made significant changes to the National Pension System (NPS) rules. These changes aim to provide greater flexibility, reducing financial worries after retirement and ensuring easy access to funds when needed. The new rules will apply to all government, private, and NPS-Lite subscribers.

Loans are now available against NPS accounts
The biggest and most useful change is that NPS accounts can now be pledged as collateral for bank loans. This will allow individuals to meet emergency financial needs without having to withdraw from their retirement fund. This feature makes NPS even more beneficial.

NPS membership extended to 85 years
Previously, the maximum age for remaining in the NPS was 75 years, but this has now been extended to 85 years. This means you can keep your money invested for a longer period, allowing your fund to grow even after retirement. This will benefit those who want to work longer or do not wish to withdraw their money immediately.

The biggest challenge at the time of retirement from NPS was purchasing an annuity or pension plan. This rule has now been simplified. Private sector employees will now only have to invest 20 percent of their total fund in an annuity. Previously, this limit was 40 percent. This clearly means that more money will be available as a lump sum.

Full withdrawal allowed up to ₹8 lakh.
If the total amount in your NPS account is ₹8 lakh or less, you can withdraw the entire amount at once. Government employees will have the option to invest 40 percent in a pension plan if they wish, while the minimum annuity limit for private employees has been set at 20 percent.

New method for withdrawing money in installments
The government has introduced a new and easy option for withdrawing money in installments, called Systematic Unit Redemption (SUR). This is similar to the SWP (Systematic Withdrawal Plan) in mutual funds. Those with funds between Rs 8 lakh and Rs 12 lakh can withdraw a lump sum of Rs 6 lakh and receive the remaining amount in installments over a period of at least 6 years. This will provide a regular monthly income after retirement.

Withdrawal Rules Before and After Age 60
The limit for withdrawing money from NPS before the age of 60 has now been increased to four times. However, there must be a gap of at least 4 years between each withdrawal. Even after the age of 60, if you continue to be in the NPS, you can withdraw up to 25 percent of your contribution every 3 years.

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