Systematic pension fund withdrawal on anvil

New Delhi: Pension fund regulator PFRDA plans to come out with a systematic withdrawal plan, which will provide flexibility to pension account holders to withdraw a lump sum fund as per their choice on completion of 60 years.

“It is at a very advanced stage. Hopefully, by the end of next quarter we should be able to come out with a scheme like that,” said PFRDA Chairman Deepak Mohanty. Currently, National Pension Scheme (NPS) subscribers after turning 60 years withdraw up to 60 per cent of the retirement corpus as a lump sum, while the remaining 40 per cent of the corpus mandatorily goes into buying an annuity.

However, a systematic withdrawal plan will allow NPS subscribers to opt for periodic withdrawal — either monthly, quarterly, half-yearly, or annually — till the age of 75 years.

“Many people requested that why we can’t stay with the fund. When my fund is giving a very good return why should I take an annuity. I like to stay on and draw that money on the frequencies on a monthly basis or quarterly basis. But that option we cannot provide as of now. So we are asking for a product like that,” he said.

Pension Fund Regulatory and Development Authority (PFRDA), the pension fund regulator increased the entry age up to 70 and the exit age to 75 keeping in view longevity.