NPS Annuity Options for Subscribers
NPS Annuity Options :
The following are the most common variants that are available:
a) Default scheme: Annuity for life of the subscriber and his or her spouse (if any) with provision for return of purchase price of the annuity- After the demise of such subscriber, the annuity will be re-issued to the family members in the order specified hereunder:
(a) living dependent mother,
(b) living dependent father.
After the coverage of all the family members specified above, the purchase price shall be returned to the surviving children of the subscriber and in the absence of children, the legal heirs of the subscriber, as may be applicable.
If subscriber does not want to purchase default annuity scheme, he may choose any of the following schemes:
b) Annuity for life with return of purchase price (amount, given to annuity service provider) on death– Employee shall get annuity (monthly pension) till he/she is alive and payment of annuity ceases on the death and the purchase price is returned to the nominee.
c) Annuity guaranteed for 5, 10, 15 or 20 years and for life thereafter
• On death during the guaranteed period — Employee shall get annuity and after his/her death during the guaranteed period, annuity is paid to the nominee till the end of the guaranteed period after which the same ceases and no return of purchase price to the nominee.
• On death after the guarantee period — Employee shall get payment of annuity till he/she is alive even after the guaranteed period and annuity ceases after his/her death and no return of purchase price to nominee.
d) Annuity for life – Employee shall get payment of annuity till he/she is alive & payment of annuity ceases on death and no return of purchase price to nominee.
e) Annuity for life increasing at simple rate of 3% p.a. Employee shall get payment of annuity till he/she is alive & payment of annuity ceases on death and no return of purchase price to nominee.
f) Annuity for life with a provision for 50% of the annuity to the spouse of the annuitant for life on death of the annuitant– Payment of annuity ceases on death of subscriber and 50% of the annuity is paid to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, payment of annuity will cease after the death of the annuitant. It can be with or without return of purchase price.
g) Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant. – Payment of annuity ceases after death of the annuitant and full annuity is payable to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, the annuity ceases after death of the annuitant. It can be with or without return of purchase price.
Subscriber can also add spouse in any of the variants (other than default) above.
All ASPs may not provide all the variants. It may vary from ASP to ASP.
Pricing of annuity also varies ASP to ASP.
Also Read: NPS Retirement Benefits for Subscribers
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