New NPS pension rules: NPS pension rules eased from today and digital life-certificate allowed

From now on, the National Pension System (NPS) pensioners don’t have to fill a separate proposal kind to decide on the annuity after exiting the pension corpus. “The Exit Form submitted by NPS retiree must be considered as the proposal form, for offering the immediate annuity product by the insurance companies,” insurance regulator Insurance Regulatory and Development Authority of India (IRDAI), acknowledged in a round on September 13, 2022.

The insurance regulator has additionally allowed the NPS pensioners to submit life-certificate digitally.

Currently, the NPS pensioners should submit an “exhaustive” exit kind to Pension Fund Regulatory and Development Authority (PFRDA) on the time of withdrawal. Then, they should fill an in depth proposal kind supplied by the insurance corporations whereas selecting their most popular annuity plans.

“… it has been observed that, PFRDA is collecting exhaustive exit form from the NPS retirees which captures necessary details which insurance companies require in the proposal form,” the insurance common observed.

“Given the duplication and to facilitate ease of doing business and simple onboarding of NPS retirees for immediate annuity products, after due consultation with the industry, IRDAI in exercise of power conferred under Section 14(2) (e) of the IRDA Act, 1999 and Section 34 of Insurance Act, 1938 issues… direction,” the IRDAI round acknowledged.

At current, it’s necessary for an NPS subscriber to utilise a minimum of 40 per cent of the entire accrued corpus to buy an annuity plan on the time of maturity. The remaining 60 per cent of the NPS corpus could be withdrawn as lump sum. If the entire corpus is lower than or equal to Rs 5 lakh, the subscriber could have an possibility of full lump sum withdrawal at maturity. For untimely exit earlier than the age of 60, an NPS subscriber wants to make use of 80 per cent of the entire NPS corpus to purchase a pension plan (annuity) from a life insurance firm.

Submission of digital life certificates
Another change that IRDAI has introduced to make the lives of NPS pensioners simpler is the submission of digital life-certificate.

“In order to facilitate ease of living for all senior citizens who are receiving annuity payments the current framework of Aadhar based authentication for life verification certification such as Jeevan Praman, a Govt. of India initiative on biometric enabled digital service for pensioners, to be adopted,” IRDAI added in it September 13 round.

These new rules will come into power with instant impact, mentioned IRDAI.