How to reclaim withdrawn but unclaimed amount from National Pension System (NPS) account

National Pension System Unclaimed Amount Withdrawal: Know what PFRDA says

NPS, withdrawal, money
While the OPS is based on the concept of defined benefits, the principle that underlies the NPS is defined contribution.

National Pension System (NPS) Unclaimed Amount Withdrawal: The Pension Fund Regulatory and Development Authority (PFRDA) has said that NPS subscribers can reclaim the amount “withdrawn but unclaimed” by applying in a fixed format (see below). In a circular dated February 7, the regulator shared the format in which subscribers can reclaim the unclaimed amount which does not earn any interest.

The regulator is also working on a module that will enable re-investment of the unclaimed amount as per the prevailing option exercised by the subscriber at the time of exit.

PFRDA noted that there are instances wherein the corpus of subscribers could not be credited to their Savings Bank (SB) Account because of incorrect bank account details. There are also scenarios where the subscribers cancel the annuity under the ‘free look period’ and the purchase price meant for the annuity returned lies in the NPS system till the selection of a new ASP (annuity service provider) by the Subscriber. “These amounts identified as ‘withdrawn but unclaimed’ which do not earn any investment returns to the benefit of Subscribers,” PFRDA said.

Also Read: Millions of users jittery over delays at EPFO

The regulator further said that subscribers can reclaim the amount as per the format (see below). Subscribers will have to submit the form to nodal officers, Points of Presence (POP), APY Service Providers, CRAs and NPS Trust (NPST) as the case may be.

Format for claiming the unclaimed amount

NPS form for withdrawal of unclaimed amount
Source: PFRDA

My Withdrawal Module

The regulator is in the process of building a subscribers’ digital interface “My Withdrawal Module (MWM)” to ease the process of reclaiming unclaimed amounts.

The MWM will have the following features:

  • Provision to submit the beneficiary bank account details and verify the same through penny drop for name matching between PRAN and Bank Account.
  • Provision to upload the proof of Bank Account
  • The option to choose ASP for reissue of annuity as per the choice of subscriber.

Also Read: NPS planner: You will need Rs 5.7 lakh/month pension if spending Rs 1 lakh/month now

Reinvestment in PRAN

As per the regulator, after building on MWM, the unclaimed amount will be reinvested in the same PRAN as per the choice of investment/PF prevailing at the time of exit.

“Post building the MWM, the amount which lies beyond one month without transferring to the beneficiary’s Bank Acct shall be reinvested in the same PRAN as per the choice of investment/PF prevailed at the time of exit, to benefit the Subscribers with ‘market-linked returns’,” the regulator said.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 13-02-2023 at 10:26 IST