National Pension System (NPS) annuity and lump sum payment: The Pension Fund Regulatory and Development Authority (PFRDA) has said that uploading certain documents will be mandatory from 1st April 2023 for NPS subscribers who want to exit and get timely annuity payments. This comes after the pension regulator in collaboration with IRDAI has simplified the process of buying annuities wherein Annuity Service Providers (ASPs) are required to use the NPS withdrawal form submitted by subscribers at the time of exit for processing of annuity.
“In the interest of Subscribers and to benefit them with the timely payment of annuity income, the upload of the documents shall be mandatory with effect from 1st April 2023,” the regulator said in a circular dated February 22, 2023.
As per the circular, the subscribers and the associated nodal officers/POPs/ Corporate will have to ensure that the following four documents are uploaded on the respective CRA user interface. They will also have to ensure that the uploaded documents are legible. (Also read: Unmatched NPS tax benefits)
- NPS Exit/ Withdrawal Form
- Proof of Identity and Address as specified in the Withdrawal form
- Bank account Proof
- Copy of PRAN card
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According to the regulator, the common proposal for exit from NPS and for buying the annuity from ASPs facilitates parallel processing of the lump sum component and annuity, reducing the time taken by ASPs while issuing annuity policies.
“The common proposal for Exit from NPS and for buying annuity from ASP facilitates parallel processing of Lump sum component and Annuity due to which the time taken by ASPs while issuing Annuity Policies is significantly reduced which result in faster Subscriber servicing and timely Annuity issuance, the regulator said.
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Under NPS rules, ASPs are Life Insurance Companies regulated by IRDAI and empanelled with the PFRDA to serve NPS Subscribers and secure their old age with a regular stream of periodical income.