NPS Annuity and Lump Sum Deferment and Continuation of Tier-II accounts
CIRCULAR
Circular No. : PFRDA/2017/32/Exit/2
Date: 09.10.2017
Τo,
All stake holders – Government (Central/State), CABS/SABs / DTO/DTA / CDDO/PRAO /PAO/DDO, NPS Trust, CRA, Points of Presence (PoPs), Retirement Advisers
Subject: Guidelines on deferment of lump sum & annuity and continuation of Tier-Il accounts under National Pension System (NPS)
The Authority has notified the PFRDA (Exits and Withdrawals from National Pension System) Regulations, 2015 on 11th May, 2015 &its first amendment on 10″ August 2017 and both are in force. This is in continuation of our circular no PFRDA/2016/13/Exit/06 dated 27-07-2016 which has provided clarification on various aspects of continuation of the NPS accounts.
To provide more clarity and better understanding of various provisions of deferment and Continuation of Tier-2 accounts as per regulations and operational guidelines We are issuing following guidelines related to deferment of lump sum & annuity and Continuation of Tier-2 accounts under NPS :
SI
no
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Query
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CLARIFICATION
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1
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Can I defer my lump sum in case of pre-mature exit
from the system?
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No, subscriber cannot defer lump sum in case of
pre-mature exit from the system.
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2
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After the attaining the age of 60 years or Superannuation, realized that I would like to
continue the NPS account. Can exercise the option of continuation?
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No, as per our exit & withdrawal system, CRA intimates the
Subscriber and associated office if any 6 months prior the date of
superannuation or age of 60 years that subscriber is going to superannuate or
going to attain the age of 60 years and also prompts to complete all the
formalities related to exit including exercising the option of deferment of
lump sum & annuity , if required This is sufficient time for the
subscriber to decide the deferment before the age of 60 years or
superannuation.
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3.
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Where employee- employer relationship exists and
Subscriber wants to Continue after the date of superannuation, will employer
help in uploading of Contributions?
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No, after availing the option of Continuation as per
prescribed process, subscriber has to shift his/her NPS account under
individual capacity and continue. Employer shall not assist in the activities
of NPS (otherwise willing to do).
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4.
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On what corpus the mandatory minimum investment of 40% of the
accumulated pension Wealth on purchase of annuity Would be applied i.e., the
Corpus available on the date of attaining 60 years or Superannuation OR the
corpus available at the time of exit after availing the benefit of further
Contributions to the NPS account.
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Minimum 40 % of the accumulated pension wealth available in the PRAN
as on the date of final exit( any age after the continuation beyond 60 years
or superannuation age) from NPS including those contributions and investment
income that have been Contributed and accrued to the account beyond the age
of 60 years or the age of superannuation shall be mandatorily utilize for
annuity purchase and remaining amount shall be paid as lump sum. In case of
unfortunate death of the subscriber, exit & withdrawal Conditions as specified
in the regulations shall apply
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5.
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Whether one can Exit at any point of time after
giving request to Continue to contribute to NPS say promise to contribute
till 70 years.
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Yes, a subscriber can Exit from NPS at any point of
time after availing the benefit of continuing to contribute to NPS
irrespective of the period of Contribution indicated by the subscriber while
submitting the request to continue to Contribute to NPS.
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6.
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Can avail the option of deferment of lump sum and annuity during the
extended period of Contributions/continuation (after the age of 60 years or
the superannuation age) ?
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No, subscriber cannot avail the option of deferment of lump sum and
annuity as available before the age of 60 years of superannuation during the
extended period because subscriber can exit the NPS system any time during
the extended period as per his/her Wish.
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7.
|
Can subscribers who have joined the NPS system
between the age of 60 years and 65 years avail the option of deferment of
lump sum and annuity
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No, subscriber cannot avail the option of deferment
of lump sum and annuity because he/she has option to continue in the system
till the age of 70 years or leave the system any time. if subscriber exits
the NPS system before continuing minimum 3 years from the date of joining,
exit shall be treated as premature exit and after 3 years it shall be treated
as normal exit and exit rules as applicable to pre-mature or normal exit
shall apply. For more details, please refer PFRDA (exit and withdrawal from
NPS) (second amendment) regulations 2017.
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8.
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Whether Tier I account can also be continued along with the Tier when
one opts for deferment of lump sum and annuity both after the age of 60 years
Or Superannuation.
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Tier-II account shall Continue: All the facilities other than one way
switch available to Tier-II before the age of 60 should continue till closure
of Tier- ( withdrawal of lump sum) or as decided by the subscriber to close
the Tier-ll.
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9.
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Whether Tier II account can also be continued along
with the Tier when one opts for deferment of lump sum only after the age of
60 years or Superannuation.
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Tier-II account shall Continue : All the facilities
other than one way switch available to Tier-II before the age of 60 should
continue till closure of Tier-I ( withdrawal of lump sum) or as decided by
the subscriber to close the Tier-l.
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10.
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Whether Tier I account can also be continued along with the Tier I
when one opts for deferment of annuity only after the age of 60 years or
Superannuation.
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Tier-II shall be closed at the time of lump Sum Withdrawal from
Tier-1
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11.
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Whether Tier-ll account can also be continued along
with the Tier I when one opts for deferment of lump sum only with an option
of phased withdrawal after the age of 60 years or Superannuation.
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Tier-II shall be closed at the time of first lump
sum withdrawal from Tier-1.
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Yours faithfully
(Venkateswarlu Peri)
Chief General Manager
Click here to View the Circular
Source : PFRDA
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