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Pension regulator PFRDA has taken the next big step to ensure that NPS subscribers get timely payment of annuity income. It has now stipulated that from April 1 as many as four specified documents (basically withdrawal and KYC documents) would have to be mandatorily digitally uploaded in the user interface of the central record keeping agency (CRA).
From the current physical mode, where documents are usually delivered to nodal offices and PoPs, the entire process will now flow through electronic mode. This would make it easy for the life insurance companies (who are acting as Annuity Service Providers) to process the payments faster, sources said. A NPS subscriber would basically have to upload the documents by themselves (do-it-yourself) and authenticate them digitally through Aadhaar.
Documents required
The four documents are NPS exit/ withdrawal form; proof of identity and address as specified in the withdrawal form; bank account proof and copy of PRAN card.
The documents uploaded should be legible and all nodal offices/ POPs/ corporates can educate the subscribers about the importance of uploading of documents and perform suitable quality checks about the legibility of those documents, PFRDA has said.
Already PFRDA in regulatory collaboration with IRDAI had simplified the process of buying annuity wherein Annuity Service Providers (ASPs) shall use the NPS withdrawal form submitted at the time of exit by the subscribers at nodal officers / POPs for issuing annuity. The detailed guidelines and benefits of parallel processing was issued on November 14, 2022.
Guaranteed minimum rate of return
Currently, the NPS gives returns annually, based on prevailing market conditions. PFRDA is now looking to have a separate scheme that can offer a guaranteed minimum rate of return to NPS subscribers, especially those who are risk averse.
India’s pension assets (NPS and Atal Pension Yojana) are growing at CAGR of about 28 per cent over the last five years, aided by strong response from the non-government sector.
NPS and APY have crossed ₹ 8.75 lakh crore as of February 11. Since interest rates in the system have gone up and equity markets have turned weak in recent weeks, any substantial ramp up in AUM in the month of March is unlikely to happen, economy watchers said.
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