New Delhi. The Pension Fund Regulatory and Development Authority (PFRDA) has announced a new facility for National Pension System Subscribers (NPS Subscribers). Under this, it will now be easier than ever to surrender annuity to the NPS subscriber to withdraw 100% of the amount. Not only this, now the entire surrender process will be completed in much less time than before. In fact, PFRDA has said that now only Annuity Service Providers (ASPs) like LIC, HDFC Life, ICICI Prudential Life and SBI Life will be able to settle the annuity surrender request. .
Surrender without regulatory interference
PFRDA has said that there will no longer be any interference from it, the Central Record Keeping Agency (CRKA) or the National Pension System Trust (NPS Trust) in the settlement of annuity surrender requests. Annuity Service Providers will settle the surrender requests listed under PFRDA on the basis of specific annuity scheme features, contractual terms, surrender clauses and Insurance Regulatory and Development Authority (IRDAI) guidelines. According to NPS, the subscribers can exit anytime as per the rules of PFRDA i.e. withdraw the entire amount. Explain that under the existing rules, it is mandatory for NPS subscribers to buy an annuity plan with 40 percent of the pension fund amount.
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What will be the role of annuity service providers
The role of ASP is to make available various types of annuity to the subscribers at the time of exit from NPS, provide minimum annuity variant option as required by PFRDA and offer any new variant as per requirement. Till now the request for surrender of annuity used to come to PFRDA. PFRDA has said in the circular issued on 22 July 2021 that now ASPs can handle annuity requests directly without referring anyone. According to the regulator, any public sector subscriber can surrender the pension if the pension continues for a long time. At the same time, annuity can also be surrendered for any personal reason including serious illness.
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Who can withdraw full amount without buying annuity
The pension fund regulator has recently allowed NPS subscribers to withdraw their entire corpus. According to PFRD, subscribers whose total pension corpus is Rs 5 lakh or less can withdraw their entire money without buying an annuity. Earlier, if the pension fund has more than Rs 2 lakh, the subscribers could withdraw a maximum of 60 percent in lump sum on retirement or on attaining the age of 60 years. According to the regulator, the limit of premature lump-sum withdrawal from pension fund has been increased from Rs 1 lakh to Rs 2.5 lakh. At the same time, the maximum age limit to join NPS has been reduced to 70 years and to exit to 75 years.
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