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Ganesh chand sharma (entrepreneur)     14 July 2014

New pension scheme

My question is regarding withdrawal from new pension scheme which came in to effect on 01-04-2010. If a government employee resigns from his job anytime before the age of 60 years than how he can get whole of the PF amount as the policy states that in case of resignation only 20 percent of the total amount can be given to a individual and rest 80 percent will be used for annutisation. Which is very unfortunate for those who want to become entrepreneur want their pf amount to start some business after quitting their job.
Please suggest some solution for the same.


Learning

 2 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     14 July 2014

National Pension Scheme offers following important features to help subscriber save for retirement:

  • The subscriber will be allotted a unique Permanent Retirement Account Number (PRAN). This unique account number will remain the same for the rest of subscriber's life. This unique PRAN can be used from any location in India.
  •  

Permanent Retirement Account Number  will provide access to two personal accounts:

  • Tier I Account: This is a non-withdrawable account meant for savings for retirement.
  • Tier II Account: This is simply a voluntary savings facility. The subscriber is free to withdraw savings from this account whenever subscriber wishes. No tax benefit is available on this account.

Ganesh chand sharma (entrepreneur)     14 July 2014

Respected Ramacharya Sir

Thanks for your reply. But u didnt get the question I asked. I already read the policy and its details but the question is why government dont return the hard earned money of the employee who has resigned from his job.

For example : A employee resigned from his job after two years of appointment and to intend start his own business. lets say  he has Rs 1 lakh in his PF account under tear -1. But as per the policy on resignation of the subscriber, 80 percent of the PF  has to be annuitized and the subscriber can withdraw remaining wealth i.e. 20 percent only.

And its a simple calculation that 80 % of the PF will account for a very less amount of pension which is not sufficient for subsistence. So it will be better to return the whole amount of PF if so desired by subscriber to invest in his business.


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