Have you heard about Systematic Lump Sum Withdrawal? What it is? Recently, the Pension Fund Regulatory and Development Authority mentioned the term ‘Systematic Lump Sum Withdrawal’ while permitting the subscribers of the National Pension System to withdraw their pension corpus. According to the official statement, the PFRDA (Pension Fund Regulatory and Development Authority) allowed the subscribers of the NPS (National Pension System) to draw through the Systematic Lump Sum Withdrawal (SLW) service up to 60 percent of their pension corpus. This withdrawing facility was proposed by the PFRDA in October. In the following sections of this article, we have given more about this development by the Pension Fund Regulatory and Development Authority. Stick with this page and go through it till the end.
PFRDA issued a circular on October 27 to provide the option of phased withdrawal of the lump sum through the SLW facility. The official circular reads, “The subscribers are allowed to withdraw up to 60 percent of their pension corpus, through the SLW on a periodical basis viz. (monthly, quarterly, half-yearly or annually) for a period till 75 years of age as per the choice at the time of their normal exit,” Continue reading this article for more details.
The subscribers of NPS post 60 years/superannuation can defer availing of annuity and withdrawing the lump sum of any combination till the age of 75 years. Furthermore, the periodic amount can be withdrawn on an annual basis or in a single tranche. The subscriber is required to make the withdrawal request each time. Partner at PSL Advocates & Solicitors, Soayib Qureshi said, “The pension that a subscriber would receive upon purchasing an annuity is supplemented by withdrawals made using the recently implemented SLW mechanism. This option is only available on lump sum NPS corpuses after the annuity is purchased, and it can be selected at the time of Superannuation (Retirement),”
You must be wondering how this Systematic Lump Sum Withdrawal option is benefiting the subscribers. It eliminates the requirement of the request every time. It allows the automated periodic selection of SLW would maximize the benefits of retirement by adding liquidity and flexibility. Subscribers would also benefit from market-linked investment gains if the money that remains invested in PRAN (Permanent Retirement Account Number) is not withdrawn, according to their investment preference. Stay tuned to this website for more details and updates.