Important Changes to Pension Withdrawal Rules – What You Need to Know

Pension Withdrawal Rules Update: A Major Shift for Pensioners

If you’ve been contemplating withdrawing your pension funds, you’re in for some significant news. There have been noteworthy changes to the rules governing pension withdrawals, specifically under the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) has recently issued an important update regarding this matter.

The PFRDA has now made ‘Penny Drop’ verification mandatory for individuals seeking to withdraw money from the National Pension System (NPS). This new requirement is aimed at ensuring the prompt and secure transfer of funds to the shareholders.

Understanding ‘Penny Drop’ Verification

The ‘Penny Drop’ verification process involves central record-keeping agencies (CRAs) examining the authenticity and active status of the bank savings account. Furthermore, it involves cross-referencing the bank account number with the ‘PRAN’ (Permanent Retirement Account Number) or the name provided in the filed documents.

Applicability of the New Rules

These updated provisions apply to all categories of withdrawals within the NPS, including the Atal Pension Yojana and NPS Lite, as well as any changes made to customers’ bank account details.

What is ‘Penny Drop’?

To elaborate, ‘Penny Drop‘ is a method used to verify the validity of an account. It involves depositing a small sum into the beneficiary’s bank account and conducting a ‘test transaction’ to confirm that the name matches the penny drop response.

According to a recent notification from the PFRDA, “Successful Penny Drop verification is a prerequisite for matching names, processing exit/withdrawal requests, and modifying customer bank account details.”

Are you a pensioner considering withdrawing funds from your National Pension System (NPS) account? It’s crucial to stay informed about the latest rule changes to ensure a smooth and secure withdrawal process.

Under the new regulations, the Pension Fund Regulatory and Development Authority (PFRDA) now requires ‘Penny Drop’ verification for all NPS shareholders. This verification process ensures the timely transfer of your funds and verifies the authenticity of your bank savings account.

The ‘Penny Drop’ process involves checking the real and active status of your bank account, matching the account number with your ‘PRAN’ (Permanent Retirement Account Number), and verifying the name associated with the account. These changes apply not only to NPS but also to the Atal Pension Yojana and NPS Lite, as well as any updates to your bank account details.

Understanding ‘Penny Drop‘ is essential for a successful withdrawal process. It involves a small sum being deposited into your bank account, followed by a ‘test transaction’ to confirm that your name matches the penny drop response.

To ensure a seamless withdrawal experience and stay compliant with the latest rules, make sure your ‘Penny Drop‘ verification is successful. Stay up-to-date with the PFRDA’s guidelines and enjoy peace of mind when accessing your pension funds.

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