NPS Exit Rule Change: The Pension Fund Regulatory and Development Authority (PFRDA) has made it mandatory for customers to upload documents from April 1, 2023, to make annuity payments faster and easier after exiting the National Pension Scheme (NPS).
The pension regulator has said that the new rules will be effective from April 1, 2023, to benefit customers with timely payment of annuity income.
What changes for NPS subscribers
Pension regulator has issued circular issued on 22 February 2023. The pension regulator has asked the subscribers and the concerned nodal officers/corporates to ensure that the documents are uploaded on the respective Central Record Keeping Agency (CRA) user interface. The documents which are mandatory to be uploaded include-
- NPS Exit / Withdrawal Form
- Proof of identity and address in the exit form
- bank account certificate
- Permanent Retirement Account Number (PRAN) Card
Pension regulator changed exit form rule last year
To ease NPS withdrawal process for subscribers, pension regulator last year said that NPS subscribers need not fill a separate proposal form for opting for annuity after exiting the pension corpus Is. The pension regulator said that the exit form submitted by NPS subscribers will be treated as annuity proposal form.
NPS exit rule
Presently an NPS subscriber should use at least 40 per cent of the total accumulated corpus at the time of maturity to buy an annuity plan. The remaining 60 percent of the NPS corpus can be withdrawn as a lump sum. If the total corpus is less than or equal to Rs.5 lakh, the customer will have the option of complete lump sum withdrawal on maturity. For premature exit before the age of 60 years, the NPS subscriber needs to utilize 80 percent of the total NPS corpus.
