PFRDA Introduces Systematic Lump Sum Withdrawal (SLW) for NPS Subscribers

In a recent circular dated October 27, 2023, the Pension Fund Regulatory and Development Authority (PFRDA) has introduced the provision of Systematic Lump Sum Withdrawal (SLW) for National Pension System (NPS) subscribers. This move aims to enhance the flexibility for subscribers, particularly those post the age of 60 or upon superannuation.
Key Features of the Systematic Lump Sum Withdrawal (SLW):

Phased Withdrawal Option:
Under the existing exit guidelines, subscribers post 60 years or superannuation could choose to defer availing annuity and withdrawing the lump sum until the age of 75. The lump sum amount could be withdrawn in a single tranche or on an annual basis, with the subscriber initiating the withdrawal request each time.
Proposed SLW Facility:
As per the proposed changes in accordance with PFRDA regulations, subscribers will now have the option of phased withdrawal of the lump sum through the SLW facility. Subscribers are allowed to withdraw up to 60% of their pension corpus systematically, with options for withdrawal frequencies such as monthly, quarterly, half-yearly, or annually. This facility is available for a period until 75 years of age, allowing subscribers to tailor their withdrawal strategy according to their preferences.
The circular urged all Nodal offices, Points of Presence, NPST, and Corporates associated with NPS to disseminate information about SLW among subscribers approaching superannuation or reaching 60 years. Central Record Keeping Agencies (CRAs) are encouraged to publish FAQs and release educational podcasts on SLW. These resources aim to highlight the benefits of SLW and guide subscribers through the initiation process.
This circular was issued in exercise of powers conferred under section 14 (1) of The Pension Fund Regulatory & Development Authority Act, 2013.
The introduction of the SLW facility reflects PFRDA's commitment to providing NPS subscribers with more choices and control over their pension withdrawals. Subscribers now have the flexibility to design a withdrawal plan that aligns with their financial needs and preferences.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu