An exit is defined as the closure of the individual pension account of the subscriber under the National Pension System. In the following scenarios;
(i). Upon attaining the age of 60 years;
(ii). Before attaining the age of 60 years;
(iii). Any time after attaining the age of 60 years till 75 years;
(iv). Due to physical incapacitation or upon suffering bodily disability before the age of 60 years; and
(v). Due to death or subscriber being declared missing.
A subscriber shall submit the exit or withdrawal application for the purpose of withdrawing the benefits upon exit as provided in the regulations, on or before the expected date of exit from the National Pension System (NPS) to the associated point of presence. In case of death or subscriber being declared missing, the nominee(s), family member(s) as specified under the service rules or legal heir(s) shall submit the claim settlement application along with the required documents to the associated point of presence of the deceased subscriber.
Annuitization – Minimum of 40% of accumulated pension wealth will be utilized for monthly annuity or pension. However, subscriber has the option to utilise more than 40% of accumulated pension wealth for purchase of annuity.
Lumpsum – Remaining 60% of accumulated pension wealth shall be paid to the subscriber.
Yes, if your accumulated pension wealth is equal to or less than a sum of five lakh rupees.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
You will continue to remain subscribed to the NPS upto the age of 75 (seventy-five) years.
Yes, the subscriber may exit at any point of time from NPS, by submitting a request to the associated point of presence or NPS Trust.
The entire accumulated pension wealth of the subscriber will be paid to the nominee(s) or legal heir(s) of the subscriber.
Yes, the nominee(s) or legal heir(s) of the subscriber have the option to purchase any of the annuities being offered upon exit.
Yes, you can defer the withdrawal of the lump sum amount. Such deferment can be upto the age of seventy-five years.
In case of death of subscriber during the period of deferment, such deferred amount of the subscriber will be paid to nominee(s) or legal heir(s).
Yes, you can defer the purchase of annuity. Such deferment can be upto the age of seventyfive years.
Yes, the subscriber has an option to purchase an annuity at any point of time during the deferment period by submitting a request to NPS Trust or any intermediary or entity authorized by the Authority for this purpose.
If death of the subscriber occurs before the due date of extended period of purchase of annuity, the entire accumulated pension wealth of the subscriber shall be paid to the nominee(s) or legal heir(s), of the subscriber.
Yes, both lump sum and purchase of annuity can be deferred but the subscriber agrees to bear the maintenance charges of the PRA, including the charges payable to the Central Recordkeeping Agency (CRA), Pension Fund (PF), Trustee Bank or any other intermediary, as may be applicable from time to time.
The subscriber shall submit his/her written request for deferment of the lump sum and/or purchase of annuity, fifteen days prior to attaining the age of 60 years, to any intermediary or NPS Trust.
Yes, the subscriber can exit from the NPS at any point of time during the deferment period.
No, upon exercising the option of continuation after attaining the age of 60 years, the options of deferment of benefits (lump sum and/or annuity) shall not be available.
No, the option of deferment of defer the lump sum withdrawal and/or purchase of annuity, shall not be available.
Yes, you are eligible for exit from NPS in case of physical incapacitation or suffering bodily disability leading to incapability to continue under NPS.
A disability certificate from a Government surgeon or doctor (treating such disability or invalidation of subscriber) stating the nature and extent of disability and also certifying that:
(a). the affected subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected subscriber, being not able to work for the remaining period of his life.; and
(b). Percentage of disability is more than seventy-five percent in the opinion of such Government surgeon or doctor (treating such disability or invalidation of subscriber).
Same as exiting from NPS upon attaining age of 60 years (refer Q3 to Q5).
You can voluntarily exit from NPS before attaining the age of 60 years if you are having subscribed to NPS for at least a minimum period of five years.
Annuitization – Minimum of 80% of accumulated pension wealth will be utilized for monthly annuity or pension.
Lumpsum – Remaining 20% of accumulated pension wealth will be paid to the subscriber.
Yes, if your accumulated pension wealth is equal to or less than a sum of two lakh fifty thousand rupees.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
You will remain in NPS, until you attain the age of eligibility for purchase of any annuity. After attaining the minimum age required for purchasing any annuity, you can purchase the annuity as per your choice.
The entire accumulated pension wealth of the deceased subscriber shall be paid to the nominee(s) or legal heir(s).
Yes, the nominee(s) or legal heir(s) of the deceased subscriber has the option to purchase any of the annuities being offered upon exit.
The accumulated pension wealth shall be paid to the family members on the basis of the legal heir certificate issued by the competent authorities of the State concerned or the succession certificate issued by a court of competent jurisdiction.
You can exit at any point of time, before attaining age of seventy-five years. However, your benefits at exit may vary depending upon the subscribed period (before or after completing three years from the date of joining of NPS).
Annuitization – Minimum of 40% of accumulated pension wealth will be utilized for monthly annuity or pension.
However, subscriber has the option to utilise more than 40% of accumulated pension wealth for purchase of annuity.
Lumpsum – Remaining 60% of accumulated pension wealth shall be paid to the subscriber.
Yes, if your accumulated pension wealth is equal to or less than a sum of five lakh rupees.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
Annuitization – Minimum of 80% of accumulated pension wealth will be utilized for monthly annuity or pension.
Lumpsum – Remaining 20% of accumulated pension wealth will be paid to the subscriber.
Yes, if your accumulated pension wealth is equal to or less than a sum of two lakh fifty thousand rupees.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
The entire accumulated pension wealth of the deceased subscriber will be paid to the nominee(s) or legal heir(s).
Upon exit from tier-I of the NPS, the tier-II account of the subscriber will also be simultaneously and automatically closed, even if an application so specified for the purpose has not been received from the subscriber or nominees or legal heirs, and amounts under the said account will be paid to the subscriber or nominees or legal heirs.
Yes, you can continue with Tier - II account as per your requirement, till closure of Tier - I account.
You can withdraw any number of times from Tier – II account.
A subscriber can withdraw the accumulated wealth either in full or part, at any time.
There shall be no limit on such withdrawals till the account has a sufficient amount of accumulated pension wealth to take care of the applicable charges and the withdrawal amount.
Yes
Up to 25% of own contributions (without considering the appreciation / returns on the amount) as on the date of application of such withdrawal.
You are allowed to partially withdraw maximum of three times during the entire tenure of subscription under the NPS.
You can initiate first partial withdrawal after completing period of three years from the date of your joining the NPS.
No. However, you will receive 25% of own contribution made between two partial withdrawals.
Partial withdrawal is allowed for the following specific purposes only.
(a). for Higher education of his or her children including a legally adopted child;
(b). for the marriage of his or her children, including a legally adopted child;
(c). for the purchase or construction of a residential house or flat in his or her own name or in a joint name with his or her legally wedded spouse. In case, the subscriber already owns either individually or in the joint name a residential house or flat, other than ancestral property, no withdrawal under these regulations shall be permitted;
(d). for treatment of specified illnesses: if the subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents suffer from any specified illness, which shall comprise of hospitalization and treatment in respect of the following diseases:
(i). Cancer;
(ii). Kidney Failure (End Stage Renal Failure);
(iii). Primary Pulmonary Arterial Hypertension;
(iv). Multiple Sclerosis;
(v). Major Organ Transplant;
(vi). Coronary Artery Bypass Graft;
(vii). Aorta Graft Surgery;
(viii). Heart Valve Surgery;
(ix). Stroke;
(x). Myocardial Infarction;
(xi). Coma;
(xii). Total blindness;
(xiii). Paralysis;
(xiv). Accident of serious/ life threatening nature.
(xv). any other critical illness of a life-threatening nature as stipulated in the circulars, guidelines or notifications issued by the Authority from time to time.
(e). to meet medical and incidental expenses arising out of the disability or incapacitation suffered by the subscriber.
(f). Towards meeting the expenses by subscriber for skill development/re-skilling or for any other self-development activities, as may be permitted by the Authority by issuance of appropriate guidelines, in that behalf.
(g). Towards meeting the expenses by subscriber for establishment of own venture or any start-ups, as may be permitted by the Authority by issuance of appropriate guidelines, in that behalf.
The request for withdrawal may be submitted through any family member of such subscriber.
Yes
If a subscriber has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his/her family.
For the purposes of nomination wherever provided in the regulation;
(i). in relation to a male subscriber, shall mean his legally wedded wife, his children, whether married or unmarried, his dependent parents and his deceased son’s widow and children;
(ii). in relation to a female subscriber, shall mean her legally wedded husband, her children, whether married or unmarried, her dependent parents, her husband’s dependent parents and her deceased son’s widow and children;
(iii). in relation to any subscriber who does not identify themselves as male or female - their legally wedded spouse, their children, whether married or unmarried, their dependent parents and their deceased son’s widow and children;
Explanation – in any of above three, if the child of a subscriber or as the case may be, the child of a deceased son of the subscriber has been adopted by another person and if, under the personal law of the adopter, adoption is legally recognized, such a child shall be considered as excluded from the family of the subscriber.
Any such nomination made in favour of a person not belonging to your family shall be invalid and the you (subscriber) have to submit fresh nomination belonging to your family.
Such Nomination shall become void and the subscriber has to submit nomination again.
Yes, you can nominate more than one nominee and can assign percentage of accumulated pension wealth among them in a way that total of such assignments should be equal to 100%.
Yes, a fresh nomination is required to be made by the subscriber upon his/her marriage.
The nomination made before marriage becomes invalid and you have to submit nomination again.
If you have no family at the time of making a nomination, the nomination may be in favour of any person or persons but if you subsequently acquire a family, such nomination shall forthwith be deemed to be invalid and you shall make a fresh nomination in favour of one or more persons belonging to your family.
Yes - the nomination can be wholly or partly in favour of a minor. Further, the subscriber may appoint a major person of his family, to be the guardian of the minor nominee in the event of the subscriber predeceasing the nominee and the guardian.
Yes – if there is no major person in the family.
You can change the nomination any number of times.
Annuity means series of payments/benefits to the subscriber at specified intervals as per the choice of subscriber paid by annuity service provider (ASP). The main objective of an annuity is to give regular income to the subscriber even after retirement/working age.
Yes, except there are some scenarios where the subscriber/nominees/legal heirs can withdraw the whole accumulated pension wealth as mentioned above.
Annuity shall be purchased from Annuity Service Providers (ASPs) empaneled with the PFRDA. The list of 14 ASPs empaneled is as under:
(i). Aditya Birla Sun Life Insurance Company Limited
(ii). Bajaj Allianz Life Insurance Company Limited
(iii). Canara HSBC Life Insurance Company Limited
(iv). Edelweiss Tokio Life Insurance Company Limited
(v). HDFC Life Insurance Company Limited
(vi). ICICI Prudential Life Insurance Company Limited
(vii). IndiaFirst Life Insurance Company Limited
(viii). Kotak Mahindra Life Insurance Company Limited
(ix). Life Insurance Corporation of India
(x). Max Life Insurance Company Limited
(xi). PNB MetLife India Insurance Company Limited
(xii). SBI Life Insurance Company Limited
(xiii). Star Union Dai-ichi Life Insurance Company Limited
(xiv). Tata AIA Life Insurance Company Limited
* For any update in empaneled Annuity Service Providers (ASPs), you are requested to refer PFRDA’s website.
Annuity starts immediately after the minimum age as required for purchasing any annuity (depending upon choice of ASP and Annuity scheme for e.g. 30, 35, 38) from any of the empaneled annuity service providers. Subscriber/nominees/legal heirs need not wait till the age of 60 years.
The following are the most common variants that are available:
(a). Annuity for life with return of purchase price (amount given to annuity service provider) on death- Subscriber will receive payment of annuity till he/she is alive and payment stops after the death of subscriber. However, purchase price will be returned to nominees / legal heirs.
(b). Annuity guaranteed for 5, 10, 15 or 20 years and for life thereafter -
On death during the guarantee period – Subscriber will receive payment of annuity till he/she is alive and thereafter during the remaining guaranteed period, annuity will be paid to the nominee till the end of the guaranteed period after which the same ceases/stops. However, return of purchase price will not be returned to nominees / legal heirs.
On death after the guarantee period – Subscriber will receive payment of annuity till he/she is alive even after the guaranteed period is over. Payment of annuity stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(c). Annuity payable for life - Subscriber will receive payment of annuity till he/she is alive and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(d). Annuity for life increasing at simple rate of 3% p.a. – Subscriber will receive payment of annuity till he/she is alive increasing at simple rate of 3% p.a. and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(e). Annuity for life with a provision for 50% of the annuity to the spouse of the annuitant for life on death of the annuitant/subscriber - Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive 50% of payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse. If the spouse predeceases the subscriber, payment of annuity will cease after the death of the annuitant.
It may be noted that this annuity variant may be taken with or without return of purchase price.
(f). Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant/subscriber – Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse.
If the spouse predeceases the subscriber, the annuity ceases after death of the annuitant.
It can be with or without return of purchase price.
It may be noted that this annuity variant may be taken with or without return of purchase price.
*Subscriber can also add spouse in any of the variants above.
**All ASPs may not provide all the variants. It may vary from ASP to ASP.
***Pricing of annuity also varies from ASP to ASP.
Only in annuity types where there is a provision of return of purchase price.
Details of annuity rates and other details may be checked on CRAs’ website [Computer Age Management Services Limited, KFin Technologies Limited and Protean eGov Technologies Limited] and website of respective empaneled ASPs.
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.
Tier – I
Lump sum Withdrawal - In case of exit upon attaining the age of 60 years lump sum withdrawal i.e. 60% of the total accumulated pension wealth is tax exempted.
Annuity - The amount utilized for purchase of annuity at exit upon attaining the age of 60 years is tax exempted. However, the annuity income (pension) received will be taxed in the year of receipt as per the applicable tax slab of the subscriber.
Partial Withdrawal – The amount received by employee under the NPS is tax exempted.
Tier – II – No tax benefit