New Delhi: In order to smoothen the process of issuing annuity to NPS subscribers, the Insurance Regulatory and Development Authority (IRDAI) and the Pension Fund Regulatory and Development Authority’s (PFRDA) have decided to do away with the need to fill out the ‘annuity proposal’ form apart from the ‘withdrawal form’.
Now, the NPS withdrawal form will be considered as annuity proposal form as well. An announcement about the same was by the IRDAI via a circular dated September 13, 2022.
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Hitherto, Subscribers under NPS at the time of their exit submit the online/offline withdrawal form (Annexure A) to the associated intermediaries viz nodal offices, POPs etc. The NPS withdrawal form is quite exhaustive and contains all the required information for issuing an Annuity and processing the lump sum.
Once they have chosen their preferred annuity plans, subscribers are needed to fill out a thorough proposal form provided by the insurance companies.
The PFRDA engaged with the IRDAI on simplifying the process of issuing an Annuity by considering the NPS withdrawal form as the Annuity Proposal and the same was agreed by IRDAI after due consultation with the Insurance industry. The PFRDA, in a circular dated November 14, 2022, listed the benefits of the coordinated action by both financial regulators which are towards the benefit of Subscribers and stakeholders:
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a. Ease of Annuity and speed of its issuance
b. Parallel Processing of Lump sum payment and Annuity issuance
c. Payment of Retirement Income through Annuity immediately after one’ s retirement and hence uninterrupted income flow to the retirees ensured.
d. Ease of Old Age Income Support.
e. Ease of doing business for the associated stake holders.
“All Subscribers are hereby informed that at the time of initiation of the exit request, the completely filled proposal form along with the specified supporting documents including KYC is to be uploaded in the respective CRA system through their login credentials,” said the PFRDA circular dated November 14.
In addition, PFRDA proposes to make the upload of the withdrawal form or document mandatory at a future date based on the response and feedback to the common proposal from the stakeholders and subscribers.
All senior citizens, including NPS Retirees who are receiving periodic annuity payments, will benefit from the provision of Aadhar-enabled authentication for life verification certification through Jeevan Praman (the Indian government’s initiative on biometric enabled digital services for pensioners), the PFRDA circular stated.
