PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

MASTER CIRCULAR

PFRDA/MASTERCIRCULAR/2024/01/CRA-01

12 January 2024

To, i. Central Recordkeeping Agency (‘CRA’) ii. National Pension System Trust (‘NPS Trust’) iii. Government Nodal Offices (i.e. CG, SGs, CABs & SABs) iv. Point of Presence (‘PoP’)

Madam / Sir,

Partial Withdrawal of Accumulated Pension Wealth under the National Pension System (NPS)

1. This Master Circular is issued in exercise of the powers conferred under Section 14(1) read with Section 14(2)(e) of the Pension Fund Regulatory and Development Authority Act, 2013.

2. This Master Circular rescinds the existing guidelines/instructions on the subject of “Partial Withdrawal of Accumulated Pension Wealth under the National Pension System” and consolidates at one place. The list of underlying circulars rescinded in this Master Circular is furnished in the Appendix.

This Master Circular is issued with the approval of the competent authority.

Yours faithfully,

-sd- (Ashish Kumar) Chief General Manager

---

INDEX

---

PART I – Introduction

1. The Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015, as amended, allow subscribers to make partial withdrawals from their accumulated pension wealth in the National Pension System (NPS) for specific purposes. To ensure compliance with the regulations, the Authority hereby provides a master circular for facilitating such partial withdrawals.

PART II – General Guidelines

2. The compliance obligation of the intermediary/entity shall not be confined merely to the Master Circular but, also the applicable laws.

3. This Master Circular shall take effect from 01 February 2024 but shall be without prejudice to their (earlier issued circulars) operation and effect, for the period when they were in force, until them being subsumed under the Master Circular. Based on the above caveat, Part IV containing the list of circulars consolidated in the Master Circular shall stand rescinded with the issuance of this Master Circular, such that they are subsumed in the Master Circular and for all purpose and intent, remain operative, with no break of continuity.

4. Notwithstanding such rescission of any circular, upon their merger in the Master Circular, or otherwise, anything done or any action taken or purported to have been done or taken, or to be taken hereafter, under the circulars now rescinded (for the period of their operation) shall be construed to have been validly taken as if the said circulars are in full force and effect and shall remain unaffected by their rescission, in any manner.

5. The previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred, any penalty, any order passed, any violation committed, any investigation, legal proceedings pending in terms of the circular (now rescinded), shall be treated as if the circulars are in full force and effect, and shall remain unaffected by their rescission, in any manner.

PART III – Specific Guidelines/Instructions

6. Purpose of Partial Withdrawal:

On the date of submitting the withdrawal form, a subscriber is permitted to make a partial withdrawal not exceeding twenty-five percent of their contributions to their individual pension account excluding the employer’s contribution, if any. Partial withdrawals are allowed for the following purposes only:

(a). Higher education of the subscriber's children, including a legally adopted child.

(b). Marriage of the subscriber's children, including a legally adopted child.

(c). Purchase or construction of a residential house or flat in the subscriber's own name or in joint name with their legally wedded spouse. However, if the subscriber already owns a residential house or flat (other than ancestral property), no withdrawal shall be permitted.

(d). Treatment of specified illnesses, including hospitalization and treatment expenses for diseases such as cancer, kidney failure (End Stage Renal Failure), primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, coronary artery bypass graft, aorta graft surgery, heart valve surgery, stroke, myocardial infarction, coma, total blindness, paralysis, accidents of serious/life-threatening nature and Covid-19.

(e). Medical and incidental expenses arising from the disability or incapacitation suffered by the subscriber.

(f). Expenses incurred by the subscriber for skill development/re-skilling or any other self-development activities.

(g). Expenses incurred by the subscriber for the establishment of her/his own venture or any start-ups.

7. Eligibility Criteria, Limit, and Frequency for Availing Partial Withdrawal:

To be eligible for the partial withdrawal, the subscriber must fulfill the following criteria:

(a) The subscriber should have been a member of the National Pension System for at least three years from the date of joining.

(b) The partial withdrawal amount should not exceed twenty-five percent of the subscriber's total contributions in their individual pension account, excluding the employer's contribution, as of the date of application for withdrawal. Returns generated on the contributions shall not be eligible for partial withdrawal.

(c) A subscriber is allowed to make a maximum of three partial withdrawals during their entire subscription tenure under the National Pension System. For subsequent partial withdrawals, only incremental contributions made by the subscriber from the date of the previous partial withdrawal shall be allowed.

8. Submission of Withdrawal Request:

The subscriber should submit the withdrawal request along with a self-declaration stating the purpose for the withdrawal to the central recordkeeping agency through their respective Government Nodal Office or Point of Presence, as the case may be. In the case where a subscriber is suffering from any illness specified in para 6(d) of this master circular, the withdrawal request may be submitted by any family member of such subscriber.

9. Processing and Verification:

Point of Presence or Government Nodal Office, as the case may be, upon receiving the withdrawal request, shall take the necessary steps to identify the beneficiary. Partial withdrawal requests shall be processed by CRA, only post successful verification of the subscriber's bank account through “Instant Bank Account verification” using methods such as penny drop or any other latest technology upgrade.

PART IV - List of circulars consolidated in the Master Circular