Exit from NPS Vatsalya
Conditions for Partial Withdrawal under NPS Vatsalya
i. Partial withdrawal is permitted under the NPS Vatsalya Scheme to address the contingency or unforeseen situations.
The reasons/conditions for partial withdrawal include:
a. Education of the minor subscriber
b. Treatment of specified illnesses of the minor subscriber
c. Disability of more than 75% of the minor subscriber
ii. The following shall be the conditions for such partial withdrawals:
a. The subscriber or guardian, as the case may be, shall be eligible to make a partial withdrawal only after being in the scheme for at least 3 years from the date of account opening.
b. A maximum amount of up to 25% of contributions (excluding returns generated thereupon) shall be allowed to be withdrawn partially. This facility is available on a declaration basis.
c. The subscriber/guardian shall be eligible to take not more than 2 partial withdrawals from the account during the period till the subscriber attains the age of 18 years.
d. Further, upon attainment of 18 years of age and subject to completion of the prescribed KYC requirements, the subscriber shall also be eligible to make a maximum of 2 additional partial withdrawals during the period between 18 and 21 years of age.
Provisions Relating to death of the subscriber and Guardianship
i. In the event of the unfortunate death of the subscriber, the entire APW in the individual pension account shall be payable to the guardian or nominee(s) or legal heir(s), as the case may be. The recipient shall also have the option to transfer the proceeds to their individual pension account under NPS.
ii. Where a guardian predeceases a subscriber, another guardian shall have to be registered by submitting the necessary KYC documents.
iii. In case of death of both parents, the legally appointed guardian may continue the account with or without making further contributions. Upon the subscriber attaining the age of 18 years, the subscriber shall have the option to either continue under the scheme or to exit therefrom in accordance with the applicable provisions.
Continuation and Exit options upon attaining majority
i. Upon attaining the age of 18 years, the subscriber shall continue under the scheme for a period of up to 3 years from the date of attaining majority, unless the subscriber opts to exit from the scheme or opts to shift under the All Citizen Model or any other applicable model of NPS.
ii. During the said 3 year period, the subscriber shall furnish fresh KYC and nominee(s) details and conform to such other requirements as may be stipulated by the PFRDA. Until such details are furnished and verified in the system, no withdrawal shall be permitted from the account. However, the invested amount shall continue to accrue returns.
iii. Upon completion of KYC requirements, the subscriber may exercise one of the following options:
a. Continue within the National Pension System, upon which the account, with entire APW, shall be seamlessly shifted to the All Citizen Model or any other applicable model of NPS.
(or)
b. Up to 80% of the APW can be withdrawn as lump sum, and the balance must be reinvested in an annuity plan from an ASP.
(or)
c. The entire APW in the individual pension account can be withdrawn as lump sum if the total APW is less than ₹8 lakh.
iv. If no option is exercised within the period starting from the attainment of the age of 18 years till the age of 21 years, the account, after expiry of such period, shall be deemed to be shifted to the high-risk variant (higher equity exposure) under the Multiple Schemes Framework (MSF) of the same Pension Fund. Upon such shifting, the options available under NPS Vatsalya for withdrawal or exit shall cease to apply, and the account shall thereafter be governed by the PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015, amended from time to time. Any subsequent withdrawals thereafter shall be allowed only after completion and verification of KYC, and fulfilling other requirements, if any.