If you also invest money in NPS, then you must know this update. Insurance regulator IRDA said that it has done away with the need to submit a separate form at the time of retirement to buy pension from NPS money.
If you also invest money in NPS, then you must know this update. Insurance regulator IRDA said that it has done away with the need to submit a separate form at the time of retirement to buy pension from NPS money. The Insurance Regulatory and Development Authority of India (IRDAI) said that the purpose of this decision is to make business easier in the insurance industry and protect the interests of policyholders.
In an order to ease the need for submission of separate forms,
IRDA said, ‘In this direction, in order to make the life of senior citizens easier, IRDA has introduced a separate form for taking instant pension products from the income of National Pension Scheme (NPS). The need to submit the form has been relaxed. At present, retirees joining the NPS have to submit a withdrawal form to the PFRDA and a proposal form to the insurance companies.
Insurance companies will also be facilitated
IRDA said that now the withdrawal form of NPS will be treated as a proposal form to buy pension. This will facilitate senior citizens as well as insurance companies. Pension Service Providers (ASPs) are insurance companies, which are regulated by the insurance regulator and empaneled by PFRDA. These companies give pension to NPS subscribers on the basis of the amount contributed by them.
The Pension Fund Regulatory and Development Authority (PFRDA) has Pension Fund Managers under NPS who are entrusted with the task of prudently investing the pension funds of the subscribers. As per PFRDA rules, members have to use at least 40 per cent of their accumulated pension wealth to buy monthly pension products. Apart from this, the remaining amount can be taken in lump sum.
