How to exit prematurely from NPS

A National Pension System (NPS) subscriber can exit his investments in three scenarios: on superannuation, on death of the subscriber, or by exiting prematurely. For partial withdrawals, certain conditions need to be fulfilled.

Conditions
Premature exit is possible only after 10 years of holding the account. At least 80% of the pension corpus must be used for purchase of an annuity that would provide a monthly pension. The remaining amount can be withdrawn as lump sum.


Form
The NPS subscriber must fill Form 302 to claim accumulated pension before attaining 60 years of age. Personal details, NPS account details, withdrawal details, annuity option and bank details must be provided. The form also carries an annexure for nomination in case of death of the subscriber.

Documents
The following documents must be enclosed along with the application for exit:

• Copy of PRAN card
• Cancelled cheque
• Pre-signed receipt acknowledging receipt of proceeds
• Copies of identity and address proofs

Online withdrawal
The subscriber can request for online withdrawal. This request has to be verified and authorised by the POP service providers.

Application
The status of application can also be checked online. Once it is processed, the amount to be paid in lump sum is credited to the bank account and annuity is issued as indicated in the application.

Points to note

1. If the accumulated corpus is less than Rs 1 lakh, the whole amount can be withdrawn as lump sum.
2. Tier II account will automatically get closed upon closure of Tier I account.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.