NPS Withdrawal and Exit Rules 2017 – FAQ
NPS Withdrawal and Exit Rules :
NPS withdrawal and Exit Rules is amended by the Government time to time. Now the PFRDA has issued a FAQ to clear the doubts through updated information. Thus we will be able to know the withdrawal conditions and what will one get when he/she exits from National Pension System.
05/10/2017
Frequently Asked Questions (FAQs)
on Exit from NPS
for Central Government Sector (CG) and Central Autonomous Bodies (CABs)
DISCLAIMER: For detailed provisions and regulations, please refer PFRDA (Exit and Withdrawal under National Pension System) Regulations 2015 and subsequent amendments under it. The same are also available on website of PFRDA at www.pfrda.org.in.
Question
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Answer
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1. What is an exit?
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An exit is defined as closure of individual
pension account of the subscriber under National Pension
System.
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2. When can I exit from NPS?
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A subscriber can exit from NPS at any point but complete
withdrawal is subject to certain conditions.
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3. Whether pre-mature exit
and voluntary retirement are same or not?
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Yes, under NPS both are same Pre-mature exit is defined under NPS as exit
re the superannuation/retirement age. Under NPS, Voluntary retirement is
treated as pre-mature exit.
However, eligibility & terms
of Voluntary retirement are defined/governed by service rules and regulations
of the respective organization.
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4. What shall be my benefits, if I opt
for pre-mature exit from' NPS?
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Pre-mature exit or
Voluntary retirement-
Minimum
Annuitisation- 80% of accumulated wealth.
Maximum Lump Sum
Withdrawal- 20% of accumulated
wealth.
If the accumulated pension wealth of the
subscriber is equal to or less than one lakh rupees or a limit to be
specified by the Authority, such subscriber shall have the option to withdraw
the entire accumulated pension wealth without purchasing any annuity.
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5. What shall be my benefits, if I
retire/ superannuate from NPS?
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6. What are the provisions to settle
the cases in the unfortunate death of the NPS subscriber during the service?
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7. What are the provisions to settle
the cases in the unfortunate death of the NPS subscriber during the service
and no nomination has been provided in the account?
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Where
no valid nomination exists in accordance with these regulations, at the time
of exit of such subscriber on account of death, the nomination if any
existing in the records of such subscriber with his or her employer for the
purpose of receiving other admissible terminal benefits shall be treated as
nomination exercised for the purposes of receiving benefits under the
National Pension System. The employer shall send a confirmation of such
nomination in its records, to the National Pension System Trust or the
central recordkeeping agency, while forwarding the claim for processing.
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8. Can I defer my lump sum in case of
pre-mature exit from the system?
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No
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9. Can I defer my lump sum in case of
retirement superannuation? If yes, what are the provisions and requirements to avail this facility?
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Yes.
The
lump sum can be deferred till the age of 70 years which can be withdrawn at
any time between superannuation and 70 years of age or every year till age of
70 years. The subscriber has to give in writing (intimation to the employer)
in the specified form at least fifteen days before the attainment of age of
superannuation and same should be authorized by the associated Nodal office
in the CRA system. If deferment is availed by the subscriber, subscriber has
to bear the maintenance charges like CRA, PFM etc.
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10. Can I defer my annuity at the time
of retirement/superannuation? yes, what are the provisions?
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Yes
Annuity purchase can
also be deferred for maximum period of 3 years. The subscriber has to give in
writing (intimation to the employer) at least fifteen days before the
attainment of age of superannuation and same should be authorized by the
associated Nodal office in the CRA system.
If the death of the
subscriber occurs before such due date of purchase of an annuity after the
deferment, the annuity shaft mandatorily be purchased by the spouse.
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11. Can I defer both lump sum and
annuity at the time of retirement/superannuation?
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Yes
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12. Can I keep on contributing in my
Tier-I -account even after retirement / superannuation?
|
Yes. The Subscriber
shall have the option to do so by giving in writing and up to which age he
would like to contribute to his individual pension account but not exceeding
seventy years of age.
In such scenario,
subscriber has to shift his/her PRAN to any POP or e-NPS. Nodal office shall
not assist in uploading of contribution after the date of superannuation.
Subscriber has to operate account in his/her individual capacity only.
Such option shall be
exercised at least fifteen days prior to the age of attaining sixty years or
age or superannuation, as the case may be, and same should be authorized by
the associated Nodal office in the CRA system.
Subscriber has to
bear the maintenance charges like PoP, CRA, PFM etc.
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13. I continue my Tier-I account even
after retirement / superannuation, Can I avail the facility of deferment of
lump sum and annuity during the extended period?
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No,
Upon exercise of the option of continuation after the superannuation, the
other options of deferment of benefits (lump sum and annuity) shall not be
available to such a subscriber.
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14. Can terminate my extension any
time before the attaining the age of 70 years or I have to continue the Tier
-1 till the age of 70 years?
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Even after exercise
of such option, the subscriber may exit at any point of time from National
Pension System, by submitting a withdrawal request as prescribed.
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15. Who shall bear the transaction
and other charges, if I avail the facility of continuation of Tier-I account
after the retirement / superannuation?
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Subscriber
has to bear all the applicable charges including maintenance charges like POP,
CRA, PFM etc., if he avails such facility.
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16. Can I continue my Tier-2 account
after the closure of Tier -1 account?
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No.
Upon exit from Tier
1 account, the Tier 2 account gets closed automatically.
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17. Can I continue my Tier -2
account, if decide to continue Tier-I account even after the retirement /
superannuation?
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Yes.
A
subscriber can contribute to his Tier 2 account till the time he has an
active Tier 1 account.
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18. What is annuity?
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An annuity is a
product that pays out regular income. It is a contract for deferred payment.
The main objective of an annuity is to give regular income to the subscriber
even after retirement/working age.
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19. In case of pre-mature exit, when
will my annuity start i.e. immediately or after the age of 60 years?
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Annuity
starts immediately after the minimum age required for purchasing any annuity
(depending upon choice of ASP and Annuity scheme. For e.g. 30, 35 or 38) from
any of the empaneled annuity service providers. Subscriber need not wait till
the age of 60 years.
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20. What are the annuity options
available to me under NPS?
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21. Whether I have to go by the
default annuity or I have a choice to decide other annuity type also?
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The
subscriber can choose any other annuity, other than default annuity,
available with the empaneled Annuity Service Providers (ASPs).
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22. Where can I check the rates
offered by the annuity service providers on various type of annuities?
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Details of annuity
rates and other details may be checked on CRA website (link given below). https://www.npscra.nsdl.co.in/annuity-serviceproviders.php
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23. Can I change my annuity service
provider or annuity type any time?
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Once
an annuity is purchased, the option of cancellation or reinvestment with
another Annuity Service Provider or in other annuity scheme shall not be
allowed unless the same is within the time limit specified by the Annuity
Service Provider, for the free look period as provided in the terms of the
annuity contract or specifically provided by the Insurance Regulatory and
Development Authority.
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24. What functions are performed by
Annuity Service Providers (ASPs)?
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Annuity Service
Providers (ASPs) are empaneled by PFRDA to annuity to subscribers through
their various schemes. Subscribers will have the option to invest their
amount into one annuity scheme ' upon retirement/resignation. ASPs would be
responsible for delivering a regular monthly pension (annuity) to the
subscriber for the rest of his/her life.
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25. Is it mandatory to purchase
annuity under NPS at the time of exit?
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Yes,
but there are some scenarios where the subscriber/nominees/legal heirs can
withdraw the whole accumulated wealth.
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26. Which companies empaneled under
PFRDA as Annuity Service Providers (ASPs)?
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1. Life Insurance
Corporation of India
2. SBI Life
Insurance Co. Ltd.
3. ICICI Prudential
Life Insurance Co. Ltd.
4. HDFC Standard
Life Insurance Co Ltd
5. Star Union
Dai-ichi Life Insurance Co. Ltd
*Subject to change
from time to time.
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27. Will I get back the amount
invested for annuity purchase?
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Only
in annuity types where there is provision of return of purchase price.
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28. In case of retirement /
superannuation, when should I submit my withdrawal request i.e. after the
date of retirement or before the retirement?
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CRA network sends a
communication 6 month before the superannuation/retirement date generating a
Claim ID to the subscriber and nodal office. It' is advisable that the
subscriber should submit all the documents to the nodal office atleast 1
month before the superannuation/retirement date.
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29. Can I withdraw before attaining
the age of retirement / superannuation?
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Yes,
it is termed as Partial Withdrawal. https://npscra.nsdl.co.in/central-forms.php
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30. If yes, how much amount can be
withdrawn?
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Up to 25% of the
contribution made by the subscriber (without considering the appreciation
/returns on the amount ) as on date of application of withdrawal.
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31. Can I withdraw any number of
times during the service?
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No
A
subscriber is allowed to withdraw only three times during the entire tenure
of service.
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32. What are the conditions under
which partial withdrawal can happen?
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33. If I avail partial withdrawal
facility, will I get the same benefit as applicable at the time of
retirement/ superannuation?
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Yes
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34.
Whether I am eligible for Gratuity?
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Yes, as per latest
0M No.7/5/2012-P&PW(F)/B dt. 26.08.2016 issued by Department of Pension
and Pensioners Welfare, the Central Government employees covered under NPS
are eligible for 'Retirement Gratuity and Death Gratuity
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35. What are tax benefits available
under IT Act, 1961 for Tier 1 Account?
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36. What are tax benefits available
under IT Act, -1961 for Tier 2 Account?
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No tax benefit is
available for Tier 2 account
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37. Where can I find list of
important forms related to exit and withdrawal?
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sd/-
(Venkateshwarlu Peri)
Chief General Manager
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