NPS (National Pension System): How Should Death Claims Be Handled If No Nominee Is Registered?

The National Pension System (NPS) facilitates retirement savings. Indian nationals can use the scheme as a long-term financial strategy to guarantee they will have adequate financial support after retirement.

The NPS is a carefully thought-out voluntary contribution retirement savings plan that can assist investors in amassing sufficient funds for their retirement during their careers.

NPS account holders can set aside some of their earnings while still working. The account holders and your legal heir will get an annuity from the corpus amount amassed over the years after retirement.

Under the PFRDA (Exits & Withdrawals under NPS) Regulations 2015 and amendments, 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.

However, what happens if the holder of the NPS account passes away without having made a nomination or with a nomination that is not valid?

The accumulated pension wealth will be paid to family members according to the legal heir certificate issued by the relevant State's Revenue authorities or the succession certificate issued by a court with appropriate jurisdiction if the dead subscriber does not register the nomination before passing away.

In cases where a legal heir or nominee is present, they 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 death withdrawal form contains a list of all the necessary paperwork.

To claim an annuity, the nominee or legal heir of the dead subscriber must submit a properly completed death withdrawal form along with several supporting documents, such as KYC documents, the subscriber's death certificate, and proof of bank account, and other required documents.

If more than one nominee has registered, they must fill out and submit the withdrawal form.

However, if a nominee or nominees don't want to claim the NPS corpus, they need to fill and submit the relinquishment deed.

At the same time, the nominee claiming the NPS benefits must submit an indemnity bond.

The major nominee will submit their withdrawal form if one nominee is a major and the other is a minor. On behalf of the minor, the withdrawal form and the minor's birth certificate will be submitted by the guardian.