Nodal pension regulator Pension Fund Regulatory and Development Authority (PFRDA) has said that intermediaries can use a video-based customer identification process (VCIP) for withdrawal claims in case of the death of NPS (National Pension System) subscribers.
It is noted that the PFRDA (Exits & Withdrawals under NPS) Regulations 2015 and amendments clearly say that in the event of a subscriber’s death, the total accrued pension wealth of the subscriber (100 per cent NPS Corpus) shall be distributed to the nominees or legal heirs as applicable.
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A legal heir or nominee can make the NPS claim by submitting a fully-filled death withdrawal form along with supporting documentation, such as the death certificate of the subscriber, KYC documents, and bank account details.
The PFRDA, in a circular issued on January 4, 2023, noted that video verification has been added as an additional layer to verify the nominee, claimant, and legal heir while clearing the withdrawal claims in case of the sudden demise of pension investors. The nominee’s credentials can be determined through Aadhaar e-KYC.
“In line with the technological advancements and for ensuring seamless exit claim processing, it has been decided to allow the intermediaries to use VCIP as an added due diligence mechanism for verification of the nominee/claimant/legal heir while processing the withdrawal claims in case of death of NPS subscribers.”
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The regulator said it has been receiving representations from intermediaries to allow the use of VCIP for faster processing of withdrawal claims.
Earlier in 2020, the nodal pension agency, via a circular dated October 6, 2020, allowed intermediaries to use the Video Based Customer Identification Process (VCIP) for any NPS-related services, including onboarding and exit.
How to get VCIP done?
The PFRDA has said that during the verification process of the nominee/claimant/legal heir, the nodal agency will keep a video record of the transaction of the person who submits the documentation for processing the claim.
Later, using Aadhaar e-KYC or DigiLocker, the nominee’s details will be verified.
The PFRDA, in the latest circular, has noted that video verification is an option and it prefers Point-of-Presence (PoP), especially online PoPs to use the emerging technology for enhanced due diligence and error-free/ timely processing of claims.
The agency has added that besides intermediaries registered with PFRDA, those registered with other financial sector regulators are also permitted to follow the VCIP guidelines for NPS-related activities for the ease of customers.
