PFRDA relaxes NPS exit rules on medical grounds

The Pension Fund Regulatory and Development Authority (PFRDA) has relaxed the exit rules under National Pension System (NPS) on medical grounds for the government employees, subscribers under All Citizen model, corporate model, NPS-Lite and Swavalamban subscribers.

The exit under the NPS is governed by the rules as per the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015, which is amended from time to time. PFRDA has issued a gazette notification relaxing exit guidelines on medical ground, called the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) (Third Amendment) Regulations, 2018.

Government sector subscribers
The exit from NPS for government sector subscribers will be allowed if the employer certifies that the subscriber has been discharged from the services of the concerned office on account of invalidation or disability.


Citizens, including corporate sector subscribers
The exit from NPS by citizens, including corporate sector subscribers will be allowed if the subscriber is physically incapacitated or has suffered a bodily disability leading to his incapability to continue with his individual pension account under National Pension System.

In such cases, the exit is allowed subject to the subscriber submitting a disability certificate from a Government surgeon or Doctor (treating such disability or invalidation of subscriber) stating the nature and extent of disability and also certifying that:

a) The subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected subscriber, being not able to work for the remaining period of his life.; and

b) Percentage of disability is more than seventy five percent in the opinion of such Government surgeon or doctor (treating such disability or invalidation of subscriber).

NPS-Lite and Swavalamban subscribers
The exit from National Pension System by NPS-Lite and Swavalamban subscribers is allowed provided that a subscriber who is physically incapacitated or has suffered a bodily disability leading to his incapability to continue with his individual pension account under National Pension System.

The exit in such cases shall be subject to the subscriber submitting a disability certificate from a Government surgeon or doctor (treating such disability or invalidation of subscriber) stating the nature and extent of disability and also certifying that:

a) The subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected subscriber, being not able to work for the remaining period of his life.; and
b) Percentage of disability is more than seventy-five percent in the opinion of such Government surgeon or doctor (treating such disability or invalidation of subscriber).

Partial withdrawals
Further, a subscriber is already permitted to withdraw not more than 25 percent of one's own contribution after being a subscriber for at least ten years in NPS for specific needs such as higher education, home purchase, marriage or critical illness needs. The new rule allows such partial withdrawals to meet medical and incidental expenses arising out of the disability or incapacitation suffered by the subscriber. In case of disability, one can partially withdraw even without exiting.