Brief of Latest Changes as per PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2021
Full withdrawal up to Rs 5 lakh
If the accumulated pension wealth in the
Permanent Retirement Account of the subscriber is equal to or less than Rs 5
lakh, or a limit as specified by the Authority, the subscriber will have the
option to withdraw the entire accumulated pension wealth without purchasing
annuity. After the exercise of this option, the right of such subscriber to
receive any pension or other amount under the NPS, or from the government or
employer, will cease.
Subscription beyond 60 years
If the subscriber wants to continue in the
NPS and contribute to his retirement account beyond the age of 60 years or the
age of superannuation, he or she can do so by giving in writing or in such form
as may be specified, and up to which he would like to contribute to his
individual pension account but not exceeding 70 years of age.
This option needs to be exercised at least 15
days prior to the age of attaining 60 years of age of superannuation, as the
case may. However, in such cases, individual pension account/ Permanent
Retirement Account will be shifted from the Government sector to All citizens
including the corporate sector and the expenses, maintenance charges and fee
payable under the NPS in respect of the said individual pension
account/Permanent Retirement Account will continue to remain applicable.
Extension
on account of minimum age
If the accumulated pension wealth of the
subscriber is more than Rs 2.5 lakh or a limit to be specified by the Authority
for the purpose, but the age of the subscriber is less than the minimum age required
for purchasing any annuity, such subscriber will continue to be subscribed to
the NPS, until he or she attains the age of eligibility for purchase of any
annuity.
However, in such cases, if the accumulated
pension wealth of the subscriber is equal to or less than Rs 2.5 lakh, such
subscriber will have the option to withdraw the entire accumulated pension
wealth without purchasing any annuity.
If the subscriber attains the age of 60 years
or superannuates in accordance with the service rules applicable to such
subscriber, at least 40 per cent out of the accumulated pension wealth of such
subscriber shall be mandatorily utilised for purchase of annuity providing for
a monthly or any other
periodical pension and the balance of the accumulated pension wealth, after
such utilization, will be paid to the subscriber in lump sum.
Annuity deferment
The subscriber will have the option to defer the purchase of
annuity for a maximum period of three years, from the date of attainment of 60
years of age or the age of superannuation, as the case may be. However, for
this, the subscriber will have to intimate his or her intention to do so in
writing in the specified form at least 15 days before the attainment of age of
60 years or the age of superannuation, as the case may be, to the National
Pension System Trust or any intermediary or other entity authorized by the
Authority for this purpose.
It will be a prior condition to opt for such deferment of annuity
purchase, that in case if the death of the subscriber occurs before such due
date of purchase of an annuity after the deferment, then the entire accumulated
pension wealth of the subscriber will be paid to the nominee(s) or legal
heir(s), as the case may be, of such subscriber.
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New
Delhi, the 14th June, 2021
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (EXITS
AND WITHDRAWALS UNDER THE NATIONAL PENSION
SYSTEM) (AMENDMENT) REGULATIONS, 2021
No.
PFRDA/12/RGL/139/8.—In exercise of the
powers conferred by sub-section (1) of Section 52 read with
sub-clause(g), (h), and (i) of sub-section 2 of Section 52 of the Pension Fund
Regulatory and Development Authority Act, 2013 (Act No.23 of 2013), the Pension
Fund Regulatory and Development Authority hereby makes the following
regulations to amend the Pension Fund Regulatory and Development Authority
(Exits and Withdrawals under the National Pension System) Regulations, 2015
namely, –
1. These regulations
may be called the Pension Fund Regulatory and Development Authority (Exits and
Withdrawals under the National Pension System) (Amendment) Regulations, 2021.
2. These shall come
into force on the date of their publication in the official gazette.
3. In the Pension Fund
Regulatory and Development Authority (Exits and Withdrawals under the National
Pension System) Regulations, 2015: –
(I). Sub-regulation
(k)(ii) of Regulation 2 shall be substituted as below: –
a subscriber having
attained the age of sixty years, and where so specifically permitted has not
exercised a choice in writing to continue to remain subscribed to such system,
till such further period as is permissible, with or without making
contributions or in respect of a subscriber who has joined National Pension
System after attaining the age of sixty years (but before attaining seventy
years of age) upon attaining the maximum age permitted to be subscribed to such
scheme or any date prior thereto, based on the specific request for closure
received from subscriber;
(II). Sub-regulation
(k)(iii) of Regulation 2 shall be substituted as below: –
death of the subscriber
before attaining the age of superannuation, or the age of sixty years, or in
cases where an option has been exercised by subscriber to continue to remain
subscribed to a certain permissible time period, death before expiry of such
period or death of a subscriber who has joined National Pension System after
attaining the age of sixty years (but before attaining seventy years of age) at
any time prior to attaining the maximum age permitted to be subscribed to such
scheme;
(III). The
introductory para under the heading Exit from National Pension System of
Chapter II shall be substituted as below: –
For the purpose of
exit from the National Pension System, the subscribers are categorized and
defined as, (1) Government sector, (2) All citizens including corporate sector
and (3) NPS- Lite and Swavalamban subscribers. The exit regulations specified
hereunder shall apply accordingly to the category to which the subscriber
belongs to.
(IV). Sub-regulation
(a) (i) of Regulation 3 shall be substituted as below: –
the following shall be
the default annuity contract that will be applicable and wherein the annuity
contract shall provide for annuity for life of the subscriber and his or her
spouse (if any) with provision for return of purchase price of the annuity and
on the demise of such subscriber and his or her spouse, the annuity be
re-issued to the family members in the order specified hereunder, at the rate
of premium prevalent at the time of purchase of such annuity by utilizing the
purchase price required to be returned under the annuity contract (until the
family members in the order specified below are covered) :
(a) living dependent
mother of the deceased subscriber;
(b) living dependent
father of the deceased subscriber.
After the coverage of
the family members specified above, the purchase price or the amount which was
to be utilised for purchase of annuity shall be returned to the surviving
children of the subscriber and in absence of children to the legal heir(s) of
the subscriber, as the case may be;
In the absence of or
non-availability of such a default annuity for any reason, the subscriber shall
be required to exercise the option for purchase of such annuity of his choice,
within the then annuity types or contracts made available by the annuity service
providers empanelled by the Authority;
Further, a subscriber
who wishes to opt out of the default option mentioned above and wishes to
choose the annuity contract of his choice from the available annuity types or
contracts with the annuity service providers, shall be required to specifically
opt for such an option:
(V). Sub-regulation
(a) (iii) of Regulation 3 shall be substituted as below: –
where the subscriber
desires to defer the purchase of annuity, he or she shall have the option to do
so for a maximum period of three years from the date of attainment of age of
superannuation, provided the subscriber intimates his or her intention to do so
in writing in the specified form or in any other manner approved by the
Authority, at least fifteen days prior to the attainment of age of
superannuation, to the Central recordkeeping agency or National Pension System
Trust or an intermediary or entity authorized by the Authority for this
purpose. It shall be a condition precedent to opt for such deferment of annuity
purchase, that in case if the death of the subscriber occurs before such due
date of purchase of an annuity after the deferment, the annuity shall
mandatorily be purchased by the spouse(if any) providing for annuity for life
of the spouse with provision for return of purchase price of the annuity and
upon the demise of such spouse, be re-issued to the family members in the order
of preference provided hereunder, at the rate of premium prevalent at the time
of purchase of the annuity, utilizing the purchase price required to be
returned under the contract ( until the family members in the order specified
below are covered):-
(a) living dependent
mother of the deceased subscriber;
(b) living dependent
father of the deceased subscriber.
After the coverage of
the family members specified above, the purchase price or the amount which was
to be utilised for purchase of annuity shall be returned to the surviving
children of the subscriber and in absence of children to the legal heir(s) of
the subscriber as the case may be;
(VI) Sub-regulation
(a)(v) of Regulation 3 shall be substituted as below: –
where the accumulated
pension wealth in the Permanent Retirement Account of the subscriber is equal
to or less than a sum of five lakh rupees, or a limit as specified by the
Authority, the subscriber shall have the option to withdraw the entire
accumulated pension wealth without purchasing annuity and upon such exercise of
this option, the right of such subscriber to receive any pension or other
amount under the National Pension System or from the government or employer,
shall extinguish;
(VII). Sub-regulation
(a) (vi) of Regulation 3 shall be substituted as below: –
where the subscriber
desires to continue in the National Pension System and contribute to his
retirement account beyond the age of sixty years or the age of superannuation,
he or she shall have the option to do so by giving in writing or in such form
as may be specified, and up to which he would like to contribute to his
individual pension account but not exceeding seventy years of age. Such option
shall be exercised at least fifteen days prior to the age of attaining sixty
years or age of superannuation, as the case may be to the central record
keeping agency or the National Pension System Trust or any other intermediary
or entity authorized by the Authority for the purpose. In such cases,
individual pension account/ Permanent Retirement Account shall require to be
shifted from Government sector to All citizens including corporate sector and
the expenses, maintenance charges and fee payable under the National Pension
System in respect of the said individual pension account/ Permanent Retirement
Account, shall continue to remain applicable:
(VIII). Proviso 1 of
sub-regulation (b) of Regulation 3 shall be substituted as below: –
Provided that such
annuity contract shall provide for annuity for life of the subscriber and his
or her spouse (if any) with provision for return of purchase price of the
annuity and on the demise of such subscriber and his or her spouse, the annuity
be re-issued to the family members in the order specified hereunder at the rate
of premium prevalent at the time of purchase of the annuity, utilizing the
purchase price required to be returned under the annuity contract (until the
family members in the order specified below are covered) :-
(i) living dependent
mother of the deceased subscriber;
(ii) living dependent
father of the deceased subscriber.
After the coverage of
the family members specified above, the purchase price or the amount which was
to be utilised for purchase of annuity shall be returned to the surviving
children of the subscriber and in the case of absence of children, to the other
legal heir(s) of the subscriber, as the case may be;
In the absence of or
non-availability of such a default annuity for any reason, the subscriber shall
be required to exercise the option for purchase of such annuity of his choice,
within the then annuity types or contracts made available by the annuity
service providers empanelled by the Authority;
Further, a subscriber
who wishes to opt out of the option mentioned above and wishes to choose the
annuity contract of his choice, from the available annuity types or contracts
with the annuity service providers, shall be required to specifically opt for such
an option:
(IX). Proviso 2 of
sub-regulation (b) of Regulation 3 shall be substituted as below: –
Provided that if the
accumulated pension wealth of the subscriber is more than two lakh fifty
thousand rupees or a limit to be specified by the Authority for the purpose but
the age of the subscriber is less than the minimum age required for purchasing
any annuity from any of the empanelled annuity service providers as chosen by
such subscriber, such subscriber shall continue to be subscribed to the National
Pension System, until he or she attains the age of eligibility for purchase of
any annuity:
(X). Proviso 3 of
sub-regulation (b) of Regulation 3 shall be substituted as below: –
Provided further that
if the accumulated pension wealth of the subscriber is equal to or less than
two lakh fifty thousand 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 and upon such exercise of this
option the right of the subscriber to receive any pension or other amounts
under the National Pension System shall extinguish and any such exercise of
this option by the subscriber, before the notification of this provision, shall
be deemed to have been made in accordance with this regulation;
(XI). Sub-regulation
(c)(i) of Regulation 3 shall be substituted as below: –
such annuity contract
shall provide for annuity for life of the spouse of the subscriber (if any)
with provision for return of purchase price of the annuity and upon the demise
of such spouse be re-issued to the family members in the order specified
hereunder at the rate of premium prevalent at the time of purchase of the
annuity, utilizing the purchase price required to be returned under the contract
(until the family members in the order specified below are covered):-
(a) living dependent
mother of the deceased subscriber;
(b) living dependent
father of the deceased subscriber.
After the coverage of
the family members specified above, the purchase price or the amount which was
to be utilised for purchase of annuity shall be returned to the surviving
children of the subscriber and in absence of children, the legal heir(s) of the
subscriber as the case may be. In the absence of or non-availability of such a
default annuity for any reason, the family member of the deceased subscriber
shall be required to exercise the option for purchase of such annuity of his
choice, within the then annuity types or contracts made available by the
annuity service providers empanelled by the Authority;
(XII). Sub-regulation
(c)(ii) of Regulation 3 shall be substituted as below: –
Provided further that
if the accumulated pension wealth in the permanent retirement account of the
subscriber at the time of his death is equal to or less than Five lakh rupees
or a limit to be specified by the Authority, the nominee or legal heir(s) as
the case may be, shall have the option to withdraw the entire accumulated
pension wealth without requiring to purchase any annuity and upon such exercise
of this option the right of the family members to receive any pension or other
amounts under the National Pension System shall extinguish.
(XIII). Sub-regulation
(a) of Regulation 4 shall be substituted as below: –
where a subscriber
attains the age of sixty years or superannuates in accordance with the service
rules applicable to such subscriber, at least forty percent out of the
accumulated pension wealth of such subscriber shall be mandatorily utilized for
purchase of annuity providing for a monthly or any other periodical pension and
the balance of the accumulated pension wealth, after such utilization, shall be
paid to the subscriber in lump sum. In case, the accumulated pension wealth of
the subscriber is equal to or less than a sum of five lakh rupees, the
subscriber shall have the option to withdraw the entire accumulated pension
wealth without purchasing any annuity:
(XIV). Para 2 of
proviso 2 of sub-regulation (a)(i) of Regulation 4 shall be substituted as
below: –
Notwithstanding
exercise of such option or automatic continuation, the subscriber may exit at
any point of time from the National Pension System, by submitting a request to
National Pension System Trust or any intermediary or entity authorized by the
Authority for the purpose. The options of deferment of lump sum as well as
annuity shall not be available to such a subscriber. In case of death of
subscriber during the period of continuation, the entire accumulated pension
wealth of the subscriber shall be paid to the nominee(s) or legal heir(s), as
the case may be, of such subscriber. The nominee(s) or family member(s) of the
deceased subscriber shall have the option to purchase any of the annuities
being offered upon exit, if they so desire;
(XV). Sub-regulation
(a)(iii) of Regulation 4 shall be substituted as below-
the subscriber shall
have the option to defer the purchase of annuity for a maximum period of three
years, from the date of attainment of sixty years of age or the age of
superannuation, as the case may be, provided the subscriber intimates his or
her intention to do so in writing in the specified form at least fifteen days
before the attainment of age of sixty years or the age of superannuation, as
the case may be, to the National Pension System Trust or any intermediary or
other entity authorized by the Authority for this purpose. It shall be a
condition precedent to opt for such deferment of annuity purchase, that in case
if the death of the subscriber occurs before such due date of purchase of an
annuity after the deferment, then the entire accumulated pension wealth of the
subscriber shall be paid to the nominee(s) or legal heir(s), as the case may
be, of such subscriber;
(XVI). Proviso 1 of
sub-regulation (b) of Regulation 4 shall be substituted as below
Provided that if the
accumulated pension wealth of the subscriber is more than two lakh fifty
thousand rupees but the age of the subscriber is less than the minimum age
required for purchasing any annuity from any of the empanelled annuity service
providers as chosen by such subscriber, such subscriber shall continue to
subscribe to the National Pension System, until he or she attains the age of
eligibility for purchase of any annuity:
(XVII). Proviso 2 of
sub-regulation (b) of Regulation 4 shall be substituted as below
Provided further that
if the accumulated pension wealth in the individual pension account of the
subscriber is equal to or less than two lakh fifty thousand rupees, or a limit
to be specified by the Authority, such subscriber shall have the option to withdraw
the entire accumulated pension wealth without requiring to purchase any
annuity;
(XVIII).
Sub-regulation (d) of Regulation 4 shall be substituted as below-
Exit from National
Pension System by subscribers, joining such pension system on or after attaining
the age of sixty years (but before attaining seventy years of age):
(XIX). Sub-regulation
(d)(i) of Regulation 4 shall be substituted as below
In case of a
subscriber, joining National Pension System under all citizens model or in
corporate model, on or after attaining the age of sixty years, (but before
attaining seventy years of age) and after having subscribed to such pension
system for at least a period of three years from the date of such joining and
thereafter till he attains the age of seventy five years, on exit, at least
forty percent out of the accumulated pension wealth of such subscriber shall be
mandatorily utilized for purchase of annuity providing for a monthly or any
other periodical pension and the balance of the accumulated pension wealth,
after such utilization, shall be paid to the subscriber in lump sum. In case,
the accumulated pension wealth of the subscriber is equal to or less than a sum
of five lakh rupees or a limit to be specified by the Authority, the subscriber
shall have the option to withdraw the entire accumulated pension wealth without
there being any requirement of purchasing an annuity;
(XX). Proviso 1 of
sub-regulation (d)(ii) of Regulation 4 shall be substituted as below
Provided further that
if the accumulated pension wealth in the individual pension account of the
subscriber is equal to or less than a sum of Rupees two lakh fifty thousand, or
a limit to be specified by the Authority, such subscriber shall have the option
to withdraw the entire accumulated pension wealth without there being any
requirement of purchase of an annuity;
(XXI). Sub-regulation
(c)(i) of Regulation 6 shall be substituted as below-
the amount withheld
which are payable under the National Pension System shall not be paid to such
subscriber until the conclusion of the departmental or judicial proceedings, as
the case may be and subject to the final orders, passed in such proceedings;
(XXII) Sub-regulation
(c)(iii) of Regulation 6 shall be substituted as below-
the amount withheld
becomes payable to the subscriber on the final settlement, as certified by the
employer specified, which has sought withholding of such benefits, and shall be
paid to the subscriber as per applicable regulation while executing exit as
soon as possible and in no case beyond ninety days of receipt of the final
order by the National Pension System Trust or any other entity or person,
authorized for the purpose by the Authority:
Provided that, in case
the amount withheld becomes payable after the death of subscriber, on the final
settlement, the benefits, shall be paid to the nominee(s) or legal heir(s), as
the case may be of such subscriber as per the applicable regulations;
(XXIII).
Sub-regulation (2) of Regulation 17 shall be substituted as below-
Within thirty working
days of the date of receipt of certificate of empanelment, the annuity service
provider shall initiate action to operationalise the system and process to be
specified by the Authority for purchase of annuities by the subscribers of the
National Pension System.
SUPRATIM
BANDYOPADHYAY, Chairperson
[ADVT.-III/4/Exty./102/2021-22]
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