National Pension System (NPS) Withdrawal: The Pension Fund Regulatory and Development Authority (PFRDA) has observed that in some cases NPS subscribers have met with unfortunate death after availing of the lump sum but before the issuance of the annuity. In such cases, the amount meant for annuity lies in the CRA (Central Record Keeping Agency).
While the exit and withdrawals under NPS are covered under the PFRDA (Exits and withdrawals under NPS) Regulations 2015 and amendments thereunder, the regulator has issued fresh guidelines for handling of the corpus meant for issuance of the annuity of deceased subscribers.
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Government Sector Subscribers
According to PFRDA guidelines, the annuity shall mandatorily be purchased by the spouse (if any) providing annuity for life of the spouse with provision for return of purchase price (ROP).
On the demise of the spouse, the annuity can be re-issued to the family members in the following order. The rate of premium prevalent at the time of purchase of the annuity, utilizing the purchase price required to be returned under the annuity contract until the family members in the order specified below are covered:
- Living dependent mother of the deceased subscriber
- Living dependent father of the deceased subscriber
“After the coverage of the family members specified above, the purchase price or the amount which was to be utilized for purchase of annuity shall be returned to the surviving children of the subscriber and in the case of absence of children, to the other legal heir(s) of the subscriber, as the case may be,” the regulator said in a circular dated October 19, 2022.
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All Citizen and Corporate Subscribers
The regulator said that the entire accumulated pension wealth paid can be paid to the nominees or legal heirs. However, the legal heirs or nominees if opted for can buy the annuity.
“NPS Trust (NPST), POPs, Corporate and Nodal Officers can engage with all those claimants of those deceased Subscribers who have availed lump sum but not bought Annuity as per the provisions mentioned above. NPS Trust informed to monitor the progress and engage with the respective nodal officers, Subscribers, POPs, corporate and stakeholders in order to ensure all pending death claims processed in a timely manner,” the circular said.
