Monday 21 November 2022

CIRCULAR - Parallel Processing of Exit and Annuity components for the benefit of NPS Subscribers. PFRDA/2022/32/ASP-EXIT/03, 14 Nov 2022


PFRDA/2022/32/ASP-EXIT/03.        14 Nov 2022        


All NPS Stake Holders 

Subject: Parallel Processing of Exit and Annuity components for the benefit of NPS Subscribers.

    PFRDA provides digitally enabled exit solutions for its Subscribers through Aadhaar / Two Factor Authentication (2FA). Under NPS, the Subscribers at the time of exit can avail of a defined amount as a lump sum and the balance amount has to be utilized for the purchase of immediate Annuity from the empanelled Annuity Service Providers (ASP).  ASPs are Life Insurance Companies under the regulatory ambit of the Insurance Regulatory & Development Authority of India (IRDAI). 

2. Hitherto, Subscribers under NPS at the time of their exit submit the online/offline withdrawal form (Annexure A) to the associated intermediaries viz nodal offices, POPs etc. The NPS withdrawal form is quite exhaustive and contains all the required information for issuing an Annuity and processing the lump sum. Post-processing of the withdrawal, the eligible amount is paid as a lump sum to the Subscribers' Bank Account and the information of those Subscribers is shared with ASPs for processing the Annuity request. ASPs engage with the Subscribers for obtaining the application for the issue of Annuity i.e. Proposal form and complete the other formalities. In the existing process, the Subscribers submit the exit form to the intermediaries of PFRDA and apply for an annuity to the ASPs selected by them.  

3. PFRDA engaged with IRDAI on simplifying the process of issuing an Annuity by considering the NPS withdrawal form as the Annuity Proposal and the same was agreed by IRDAI after due consultation with the Insurance industry. The communication issued by IRDAI on Immediate Annuity Products dt. 13.09.2022 is provided at Annexure B.   

4. The benefits of the coordinated action by both financial regulators are manifold towards the benefit of Subscribers & stakeholders as described below:  

    a.  Ease of Annuity and speed of its issuance 

    b. Parallel Processing of Lump sum payment and Annuity issuance 

    c. Payment of Retirement Income through Annuity immediately after one' s retirement and hence uninterrupted income flow to the retirees ensured.  

    d. Ease of Old Age Income Support. e. Ease of doing business for the associated stake holders. 

5. All  Subscribers  are  hereby  informed  that  at  the time  of  initiation  of  the exit  request, . the completely  filled  proposal  form (Refer  Page  no.  5  of  Annexure  A) credentials along  with  the  specified  supporting  documents  including  KYC is  to  be  uploaded  in  the  respective  CRA  system  through  their  login .  The  nodal  officers,  POPs  &  NPST of 

6. Subscribers. are  advised  to  ensure  the  same for  the  benefit Based  on  the  response  and  feedback  on  the  common  proposal  from  the  stakeholders &  subscribers,  PFRDA  proposes  to  make  the  upload mandatory  at  a future date. 

7. In  order  to  facilitate  ease  of  living  for  all of  the  Withdrawal  form/document senior  citizens  including  NPS  Retirees  who are  receiving  periodical  annuity  payments,  Aadharenabled  authentication  for  life verification  certification  viz  Jeevan  Praman  (Govt.  of  India's  initiative  on  bio  metric  enabled digital service  for pensioners) sha ll be provided. 

  This  circular  is  being  issued  to  protect  the  interests  of  subscribers  and  to  regulate, promote  and  ensure  orderly  growth  of  the  National  Pension  System  and  pension  schemes to  which the Act  applies. 

Digitally signed by 


Chief General Manager


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