NPS Withdrawal Rules Change: All You Need To Know
The PFRDA has introduced new changes to the NPS exit process to speed up the annuity payments process.
The National Pension System, or the NPS, is a popular retirement savings scheme in India that allows individuals to contribute regularly towards their retirement and build a corpus of funds. However, the process of exiting the scheme and choosing annuities has been a confusing process that has caused difficulties for subscribers.
To simplify this process, the Pension Fund Regulatory and Development Authority, or the PFRDA, has introduced new rules that came into effect on April 1. These rules are aimed at reducing the processing time taken by annuity service providers. ASPs are life insurance companies regulated by the Insurance Regulatory and Development Authority of India and empanelled with the PFRDA to serve NPS subscribers.
One of the key changes introduced is a common proposal form for exiting NPS and buying the annuity from the ASP. This will significantly reduce the processing time taken by ASPs and make the process smoother and more streamlined. However, to take advantage of these new rules, it is important for NPS subscribers to upload their withdrawal and Know Your Customer documents. This will enable the parallel processing of exiting and buying the annuity, which will, in turn, help reduce the processing time. ASPs will then use the NPS withdrawal form submitted at the time of exit to simplify the process. As per the new changes, it is important for subscribers to be aware of these new rules and to ensure that they upload their withdrawal and KYC documents to benefit from the new rules.
Documents Required For NPS Exit
The documents required for NPS exit as per the changes will be:
NPS exit/withdrawal form
Identity proof and address proof
Copy of Permanent Retirement Account Number (PRAN card)
Bank account proof
NPS Withdrawal/Exit
The below steps must be followed to initiate the exit from NPS and buy/choose an annuity with the ASP:
Step 1: NPS subscribers must log in to the CRA system and initiate the process for the exit.
Step 2: While you are initiating your exit request, messages about OTP authentication and authorisation by Nodal Office/POP will be displayed on the screen.
Step 3: Moreover, information like your bank account details, address, and nominee information will be auto-filled from your NPS account.
Step 4: Next, you must select the percentage of the NPS funds you wish to allocate for lump sum withdrawal and annuity. Moreover, you will need to select which annuity to invest in.
Step 5: Your bank account registered in the CRA will then be verified. It’s important to upload KYC documents as well as a copy of PRAN/e-PRAN and bank account proofs while submitting your NPS exit request.
Step 6: You must authorise the completion of the exit process either via OTP verification or e-sign verification via Aadhaar.
