From now on, National Pension System (NPS) pensioners need not fill up a separate proposal form to opt for annuity after exit from the pension fund. Insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) in a circular dated September 13, 2022 said, “The exit form submitted by NPS retiree shall be treated as proposal form by insurance companies for offering immediate annuity product. should.” ,

The insurance regulator has also allowed NPS pensioners to submit life certificates digitally.

Currently, NPS pensioners have to submit a “complete” exit form to the Pension Fund Regulatory and Development Authority (PFRDA) at the time of withdrawal. Then, they have to fill up a detailed proposal form offered by the insurance companies while selecting their preferred annuity plans.

“… It is observed that, PFRDA is collecting complete exit forms from NPS retirees, which includes essential details that the insurance companies require in the proposal form,” observed the insurance routine.

“In view of the duplication and ease of doing business and for facilitating simple onboarding of NPS retirees to immediate annuity products, after due consultation with the industry, IRDAI has amended Section 14(2)(e) of the IRDA Act, 1999. exercised the power conferred under Section 34 of the Insurance Act, 1938… and issues directions,” the IRDAI circular stated.

At present, it is mandatory for an NPS subscriber to use at least 40 per cent of the total accumulated corpus to purchase an annuity plan at the time of maturity. The remaining 60 per cent of the NPS corpus can be withdrawn as a lump sum. If the total corpus is less than or equal to Rs 5 lakh, the subscriber will have the option to withdraw in full lump sum on maturity. For premature exit before the age of 60 years, an NPS subscriber needs to utilize 80 per cent of the total NPS corpus to purchase a pension plan (annually) from a life insurance company.

to present or to show digital life certificate
Another change that IRDAI has announced to make the lives of NPS pensioners easier is the submission of digital life-certificates.

“To make life easier for all senior citizens receiving annual payments, the current framework of Aadhaar based authentication for Jeevan Pramaan like Jeevan Pramaan, Government of India’s initiative on Biometric Enabled Digital Service for Pensioners is to be adopted. IRDAI said in this. The circular dated 13th September has been added.

IRDAI said that these new rules will come into force with immediate effect.