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      Question

      Vikram, a 45-year-old private sector professional, has

      recently opened an NPS Tier-I account. Examine the following statements about his NPS entitlements: I. Given that revised NPS rules allow investment up to age 70 for new subscribers in the All Citizen Model, Vikram can contribute to his NPS for 25 more years. II. Vikram becomes eligible to make a partial withdrawal from his NPS corpus after completing a minimum of 3 years of subscription. III. Vikram has accumulated a corpus of Rs. 40 lakh. If he opts for premature exit, the maximum lump sum he can withdraw is Rs. 8 lakh (20% of corpus), with the balance mandatorily used for annuity purchase. IV. Vikram can switch his NPS pension fund manager up to 5 times in any given financial year. Which of the above statements are correct?
      A I and II only Correct Answer Incorrect Answer
      B II and III only Correct Answer Incorrect Answer
      C I, II and IV only Correct Answer Incorrect Answer
      D II, III and IV only Correct Answer Incorrect Answer
      E I, III and IV only Correct Answer Incorrect Answer

      Solution

      Statement I is correct under revised PFRDA rules, the maximum exit age for the All Citizen Model is 70 years, which gives Vikram exactly 25 more years of contribution from age 45. Statement II is correct a subscriber can make a partial withdrawal after completing a minimum of 3 years. Statement III is also correct for premature exit before age 60, the subscriber can withdraw a maximum of 20% of the corpus as a lump sum (20% of Rs. 40 lakh = Rs. 8 lakh), and the remaining 80% must be used to purchase an annuity. Statement IV is incorrect the pension fund manager can be changed only once per financial year under PFRDA rules, not 5 times. Since Statements I, II, and III are all correct and Statement IV is false, the best answer among the given options is (B).

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