For the ease of NPS over 50 million NPS subscribers as of May 2022, the Pension Fund Regulatory and Development Authority (PFRDA) and the Insurance Regulatory and Development Authority of India (IRDAI) recently brought in some changes. Any individual who is planning to invest in the government-backed scheme or is about to retire must be aware of the latest changes.
The NPS is a defined contribution retirement savings scheme administered and regulated by the PFRDA. The NPS provides various retirement schemes, with Atal Pension Yojana being the most popular one. Here are the latest changes announced by the regulatory body:
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NPS e-nomination process flow change
Modifying the process flow of e-nomination for both government and corporate sector subscribers, the PFRDA stated that after the subscriber initiates e-nomination, the nodal office would have the option to either reject or accept the request. In case, no action is initiated by the nodal office within 30 days of the request then it would get accepted in the CRA system.
The revision in the e-nomination process flow shall be effective from October 1, 2022. “The revised process flow shall also be applicable to the existing e-nomination, which are still unauthorised,” PFRDA clarified.
Form to buy an annuity plan at maturity
IRDAI, on September 13, relaxed the requirement of submitting a separate proposal form for buying annuity products at maturity. To bring ease of living for senior citizens, IRDAI has relaxed the requirement of submitting separate proposal form for taking the Immediate Annuity products from proceeds of National Pension Scheme (NPS),” the insurance regulator said. The rule came into effect on September 13.
Earlier, NPS investors had to submit an exit form to PFRDA and a detailed proposal form to the life insurance company for buying an annuity plan to receive pension. From now on, the exit form of NPS will be treated as the proposal form for purchasing annuities from life insurance companies.
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Digital life certificate submission
Along with relaxing the requirement of submitting a separate proposal form for buying annuity products at maturity, the regulator also allowed the NPS pensioners to submit life-certificate digitally. It advised insurers to adopt Adhaar based authentication for verification of life certificate, such as Jeevan Pramaan, a Government of India initiative on biometric enabled digital service.
Credit card contributions stop for NPS tier-2 account holders
The PFRDA stopped NPS tier-2 account holders to make contributions through credit cards from August 3. “The Authority has decided to stop the facility of payment of subscriptions/contributions using credit card as a mode of payment in the Tier-II account of NPS,” it said in a circular last month.
However, NPS tier-1 account holders can still make payment from the credit cards.
