nps-faq-corporate-english

What is Corporate NPS?

NPS Corporate Sector Model is the customized version of core NPS to suit various organizations and their employees to adopt NPS as an organized entity within purview of their employer-employee relationship.

What is Permanent Retirement Account Number (PRAN)?

On successful registration of NPS Tier I account, a unique 12 digit PRAN (Permanent Retirement Account Number) is allotted to the subscriber. PRAN is a portable number provided to each subscriber under NPS and remains with him throughout the investment tenure.

What are the benefits to the employer in this model?

The Corporate employer registered with the NPS, can claim tax benefits for the amount contributed towards pension of employees. From 1st April, 2012 upto 10% of the salary (basic and dearness allowance) of employers Contribution can be deducted as ‘Business Expense’.
The Corporate can save on their expenses incurred on formation of trust, management of funds and recordkeeping etc.
Corporate can act as a facilitator to extend benefits of NPS to its employees
Corporate may select the PF for its employees or leave the option to employees for selecting PF for themselves.
Platform to co-contribute for employees’ pension.

What are the benefits to the corporate in this model?

Cheapest investment product with better growth options through long term market-linked returns.
Provides choice of various funds with a flexible investment patterns.
Individual Retirement Account for record keeping at individual level ensures portability across geographies and employment.
Employee’s as well as Employer’s contribution towards the NPS account of an employee is eligible for tax exemption as per the Income Tax Act, 1961 as amended from time to time.
Additionally, offers Tier II account which is a voluntary savings facility with anytime liquidity/withdrawal option.
Offers choice of Pension Funds to subscriber with an option to switch every year.
outine disclosure of the funds helps subscriber to achieve better fund management.

Can a Subscriber shift from UOS to Corporate Sector?

Yes. Subscriber has to submit Form ISS to the POP

What types of account are available under this model?

Two types of accounts are available to the employees under this model:

Tier I account – is a non-withdrawable account where the subscriber/employer/or both contributes savings for retirement. Tax benefit is available for both employer and employee contributions.
Tier II account – is a voluntary savings account from which subscribers are free to withdraw his / her savings whenever he/she wishes subject to minimum contribution & balance.

What are the tax benefits available to the employee and employer?

Employees Contribution: Contribution amount to National Pension Scheme is tax free, that is, it is deductible from the total income), subject to upper limits Employee/Self-employed/Professional/Individual Contribution Eligible for tax deduction of up to 10% of salary (Basic + Dearness Allowance) or 10% of total gross income under section 80CCD(1), which is within the limit specified under section 80CCE of Rs. 1,50,000.
Eligible for additional tax deduction of up to Rs. 50,000 under section 80CCD(1B). This benefit will not attract the limit specified under section 80CCE. Hence contribution would be allowed over & above Rs. 1,50,000.
Employer Contribution: Eligible for tax deduction of up to 10% of salary (Basic + Dearness Allowance) under section 80CCD(2). An eligible contribution made by the employer is allowed as a business expense under Section 36 of Income Tax Act 1961.

Is there any minimum number of employees required for adopting Corporate NPS?

There is no requirement for minimum number of employees for adopting NPS.

Who can select the Investment Option Employee or Employer?

There is flexibility to select scheme either at Corporate level or Subscriber level. Corporate may opt for investment choice for its employee or leave the option to the employees.

What is the architecture of NPS and entities involved?

NPS architecture involves below mentioned entities:

PFRDA : PFRDA is regulator for NPS. It is responsible for registration of various intermediaries in the system such as CRA, Pension Fund Managers, etc. It shall also monitor the performance of various intermediaries and ensure that all stakeholders comply with the guidelines/regulations issued by PFRDA from time to time.

CRA: Record keeping, administration and customer service functions for all NPS subscribers will be centralized and performed by CRA Protean eGov Technologies Limited (formerly known as NSDL e-Governance Infrastructure Limited) & KFintech CRA. On basis of instructions received from subscribers, CRA shall transmit such instructions to the appointed Pension Funds on regular basis. CRA will also provide periodic & consolidated NPS statements to each subscriber.

Pension Fund/Pension Fund Managers: Pension Fund Managers are responsible for managing investments of NPS subscribers. Pension fund managers invest strictly as per PFRDA investment guidelines. They also communicate NAV of each scheme to CRA on regular basis. NPS allows you to choose from any 1 of below mentioned Pension Fund Managers:

ICICI Prudential Pension Funds Management Company Limited
HDFC Pension Management Company Limited
Kotak Mahindra Pension Fund Limited
LIC Pension Fund Limited
SBI Pension Fund Private Limited
UTI Retirement Solutions Limited
Birla Sun life Pension Management Limited
Tata Pension Management Limited
Max Life Pension Fund Management Limited
Axis Pension Fund Management Limited

Annuity Service Providers: Annuity Service Providers are responsible for delivering pension/annuity to NPS subscriber as per chosen annuity plan. You have choice to select any 1 of annuity service providers upon exit from NPS as per guidelines.

To view Annuity Service Providers empaneled with PFRDA you may click on below mentioned link http://www.npstrust.org.in/content/list-annuity-service-providers-asps-empanelled-pfrda

Trust & Trustee Bank: NPS trust is responsible for taking care of the funds under NPS and is registered owner of all NPS assets. Trust holds an account as NPS Trustee Bank (Axis Bank). NPS Trustee Bank facilitates fund transfers across various entities of NPS system viz. Pension Fund Managers, Annuity Service Providers, subscriber, etc. NPS Trust is being administered by the Board of Trustees, as constituted by PFRDA.

Point of Presence (POP): POP is first point of interaction between subscriber and NPS architecture. POP is responsible for performing functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to designated NPS intermediaries like CRA etc. ICICI Securities is one of the PFRDA empanelled POP.

Custodian: Custodian is responsible for the custody of underlying assets. Custodian is SEBI registered custodial service. Stock Holding Corporation of India (SHCIL) is currently Custodian under NPS.

Will adopting Corporate NPS dilute any statutory requirement of the Corporate?

Adopting NPS will not dilute any statutory requirement for the corporate.

What is the minimum and maximum investment limit in NPS?

The minimum NPS Tier 1 contribution is Rs 1,000 per year. However, there is no maximum limit on the NPS Tier 1 contribution.

Can a Corporate change the scheme preference and Pension Fund Manager in a financial year?

Scheme preference can be changed four times and Pension Fund Manager can be changed once in a financial year.

What is an exit?

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.
(v) Due to death or subscriber being declared missing.

What is the procedure to exit from NPS?

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.

What will be my benefits at exit?

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.

Can I completely withdraw my accumulated pension wealth without annuitization?

Yes, if your accumulated pension wealth is equal to or less than a sum of five lakh rupees.

Will I get an annuity if I have completely withdrawn my accumulated pension wealth?

No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.

What will happen in case I do not exit beyond age of 60 years?

You will continue to remain subscribed to the NPS upto the age of 75 (seventy-five) years.

Can I exit during the automatic continuation period extended beyond the age of 60 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.

What will happen in case of death of subscriber during the period of automatic continuation?

The entire accumulated pension wealth of the subscriber will be paid to the nominee(s) or legal heir(s) of the subscriber.

Whether annuity can be purchased by a nominee or the legal heir of the deceased 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.

Can I defer my lump sum withdrawal?

Yes, you can defer the withdrawal of the lump sum amount. Such deferment can be upto the age of seventy-five years.

What will happen in case of death of subscriber during the period of deferment of lump sum withdrawal?

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).

Can I defer the purchase of annuity?

Yes, you can defer the purchase of annuity. Such deferment can be upto the age of seventy- five years.

Whether annuity can be purchased during the deferment period?

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.

What will happen to purchase of annuity in case of death of subscriber during deferment period?

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.

Can I defer my both - lump sum and purchase of annuity?

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.

What is the procedure to defer the lump sum withdrawal and/or purchase of annuity?

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.

Can I exit during the deferment period of lump sum and/or annuity?

Yes, the subscriber can exit from the NPS at any point of time during the deferment period.

If I continue my Tier - I of PRA even after attaining the age of 60 years, Can I avail the facility of deferment of lump sum and/or annuity during the extended 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.

Whether can I defer the lump sum withdrawal and/or purchase of annuity in the automatic continuation period?

No, the option of deferment of defer the lump sum withdrawal and/or purchase of annuity, shall not be available.

Am I eligible for exit if I am suffering from any disability?

Yes, you are eligible for exit from NPS in case of physical incapacitation or suffering bodily disability leading to incapability to continue under NPS.

What are the documents required to exit from 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.

(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).

What will be my benefits?

Same as exiting from NPS upon attaining age of 60 years (refer Q3 to Q5).

What will happen to my accumulated pension wealth if I opt for pensionary relief provided by the employer?

If employer provides pensionary relief in case of invalidation or disability during service, the employer shall have the right to adjust or seek to transfer the part or full accumulated pension corpus of the subscriber to itself as per the applicable service rules. The remaining accumulated pension corpus, if any, shall be paid in lump sum to the subscriber.

When can I exit from NPS?

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.

What will be my benefits at the exit?

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.

Can I completely withdraw my accumulated pension wealth without annuitization?

Yes, if your accumulated pension wealth is equal to or less than a sum of two lakh fifty thousand rupees.

Will I get an annuity if I have completely withdrawn my accumulated pension wealth?

No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.

What will happen if my accumulated pension wealth is more than a sum of two lakh fifty thousand rupees and my age is less than the minimum age required for purchasing any annuity from any of the empaneled annuity service providers?

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.

What are the provisions to settle the case upon unfortunate death of the subscriber?

The entire accumulated pension wealth of the deceased subscriber shall be paid to the nominee(s) or legal heir(s).

Whether annuity can be purchased by a nominee or the legal heir of deceased subscriber?

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.

What will happen if nomination is invalid?

Where no valid nomination exists in accordance with these regulations, at the time of exit on account of death of subscriber, the nomination, if any, existing in the records of his or her employer for the purpose of receiving other admissible terminal benefits shall be treated as nomination for exit under the NPS.

The employer shall send a confirmation of such nomination in its records, to the NPS Trust or the CRA, while forwarding the claim for processing.

However, if valid nomination cannot be established even after referring the employer’s record as mentioned above, such case shall be settled to legal heirs.

What will happen to accumulated pension wealth of deceased subscriber in case pensionary relief option provided by the employer?

If employer provides pensionary relief to the family members as specified under the service rules or on the basis of the legal heir certificate of the deceased subscriber, the employer shall have the right to adjust or seek to transfer the part or full accumulated pension corpus of the subscriber to itself as per the applicable service rules.

The remaining accumulated pension corpus, if any, shall be paid in lump sum to the nominees (s) or the legal heir(s).

What are the provisions in case a subscriber goes missing?

Twenty percent of the accumulated pension wealth shall be paid as an interim relief in lump sum to the nominee(s) or legal heir(s) of the subscriber and after determination of subscriber as missing and presumed dead as per the provisions of the Indian Evidence Act 1872 and amendments thereto, the remaining eighty percent out of the accumulated pension wealth of the subscriber shall be paid to the nominee(s) or legal heir(s) of the subscriber.

Whether employer can withhold accumulated pension wealth under the NPS?

Yes, the President of India or the Governor of a State, or the head of the organisation, in respect of a body corporate or other entity under the ownership and control, either of the central government or any state government or a government company, as the case may be, if so specifically provided in the service rules, governing the terms of employment of the subscriber with it, reserves the right of withholding the part of pension wealth, accumulated through co-contributions made by the employer to the Tier-I account of the subscriber and the investment income accruing thereon, for the purpose of recovery of the whole or part of any pecuniary loss caused, provided such loss is established, in any departmental or judicial proceedings, initiated against such subscriber by the employer concerned.

When employer can exercise its right of withholding of accumulated pension wealth under the NPS?

Right of withholding has to be exercised by the employer prior to the date of superannuation of the subscriber, pursuant to a notice to be given to the NPS Trust, and seeking to withhold the said pension wealth of such subscriber.

Whether subscriber will be eligible to receive the amount withheld by employer?

The amount withheld which is payable under the NPS will not be paid to the subscriber until the conclusion of the departmental or judicial proceedings, and subject to the final orders, passed in such proceedings.

Whether subscriber will be eligible to receive the amount withheld by employer?

Whether the amount withheld will remain subscribed to existing scheme or will it be liquidated?

The amount withheld by the employer will remain subscribed to the scheme in the mode and manner in which it was held prior to resorting to such action by the employer specified.

When will the amount withheld be settled?

The amount withheld becomes payable to the subscriber on the final settlement, as certified by the employer specified, which has sought withholding of such benefits, and will be paid to the subscriber as per applicable regulation while executing exit as soon as possible and in no case beyond ninety days of receipt of the final order by the NPS Trust. Provided that, in case the amount withheld becomes payable after the death of subscriber, on the final settlement, the benefits, will be paid to the nominee(s) or legal heir(s) of such subscriber as per the applicable regulations.

When can I exit?

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).

What will be my benefits if I opt to exit after completing three years?

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.

Can I completely withdraw my accumulated pension wealth without annuitization?

Yes, if your accumulated pension wealth is equal to or less than a sum of five lakh rupees.

Will I get an annuity if I have completely withdrawn my accumulated pension wealth?

No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.

What will be my benefits if I opt to exit before completing three 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.

Can I completely withdraw my accumulated pension wealth without annuitization?

Yes, if your accumulated pension wealth is equal to or less than a sum of two lakh fifty thousand rupees.

Will I get an annuity if I have completely withdrawn my accumulated pension wealth?

No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.

What will happen in case of death of the subscriber?

The entire accumulated pension wealth of the deceased subscriber will be paid to the nominee(s) or legal heir(s).

What will happen to Tier – II account in case of exit from Tier-I?

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.

Can I continue Tier - II account after exercising the option of continuation of Tier - I account?

Yes, you can continue with Tier - II account as per your requirement, till closure of Tier - I account.

How many times can I withdraw from Tier – II account?

You can withdraw any number of times from Tier – II account.

How much can I withdraw 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.

Can I partially withdraw funds from my accumulated pension wealth before exit?

Yes.

How much funds can be partially withdrawn?

Up to 25% of own contributions (without considering the appreciation / returns on the amount) as on the date of application of such withdrawal.

How many times can I partially withdraw funds?

You are allowed to partially withdraw maximum of three times during the entire tenure of subscription under the NPS.

When can I initiate my first partial withdrawal?

You can initiate first partial withdrawal after completing period of three years from the date of your joining the NPS.

Is there any time gap between two partial withdrawal applications?

No.
However, you will receive 25% of own contribution made between two partial withdrawals.

What are the conditions under which partial withdrawal can be exercised?.

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:

Cancer
Kidney Failure (End Stage Renal Failure)
Primary Pulmonary Arterial Hypertension
Multiple Sclerosis
Major Organ Transplant
Coronary Artery Bypass Graft
Aorta Graft Surgery
Heart Valve Surgery
Stroke
Myocardial Infarction
Coma
Total blindness
Paralysis
Accident of serious/ life threatening nature.
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.

What is the procedure, if I am unable to submit my partial withdrawal application due to specified illness?

The request for withdrawal may be submitted through any family member of such subscriber.

Is nomination mandatory in NPS?

Yes.

Who can be nominated?

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.

What is the definition of family for the purpose of Nomination under NPS?

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.

What happens if I nominated a person not belonging to my family, despite having family?

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.

What happens if the nominee predeceases the subscriber?

Such Nomination shall become void and the subscriber has to submit nomination again.

Can I nominate more than one person and what shall be percentage of accumulated pension wealth among nominees?

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%.

Is it mandatory to file fresh nomination after the marriage?

Yes, a fresh nomination is required to be made by the subscriber upon his/her marriage.

What will happen to my nomination if I have not filed a fresh nomination after marriage?

The nomination made before marriage becomes invalid and you have to submit nomination again.

Who can be nominated if I do not have a family?

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.

Can I nominate a minor?

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.

Can I appoint any other person to be guardian to minor nominee?

Yes – if there is no major person in the family.

How many times can I modify the nomination?

You can change the nomination any number of times.

What is annuity?

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.

Is it mandatory to purchase annuity under NPS at the time of exit?.

Yes, except there are some scenarios where the subscriber/nominees/legal heirs can withdraw the whole accumulated pension wealth as mentioned above.

Which companies are empaneled by the PFRDA as ASPs to provide annuities under NPS?

Annuity shall be purchased from Annuity Service Providers (ASPs) empaneled with the PFRDA. The list of 14 ASPs empaneled is as under:

Aditya Birla Sun Life Insurance Company Limited
Bajaj Allianz Life Insurance Company Limited
Canara HSBC Life Insurance Company Limited
Edelweiss Tokio Life Insurance Company Limited
HDFC Life Insurance Company Limited
ICICI Prudential Life Insurance Company Limited
ICICI Prudential Life Insurance Company Limited
Kotak Mahindra Life Insurance Company Limited
Life Insurance Corporation of India
Max Life Insurance Company Limited
PNB MetLife India Insurance Company Limited
SBI Life Insurance Company Limited
Star Union Dai-ichi Life Insurance Company Limited
Tata AIA Life Insurance Company Limited.

* For any update in empaneled Annuity Service Providers (ASPs), you are requested to refer PFRDA’s website.

In case of exit before attaining the age of sixty years from NPS, when will annuity start i.e. immediately or after the age of 60 years?

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.

What are the annuity options available under NPS?

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.

Whether amount invested in annuity will be returned?

Only in annuity types where there is a provision of return of purchase price.

Where can I check the rates offered by the annuity service providers on various type of annuities?

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.

Can I change my annuity service provider or annuity type any time?

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.

What are tax benefits available?

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 benefits

What are POP-SP’s and how do I reach out to them?

POP-SP's are network of branches empanelled to assist subscribers in opening NPS Tier 1 and 2 a/c's and other service related requests under NPS. Please click the below link to check details of POP-SP's.

http://content.icicidirect.com/mailimages/POP_SP_List.pdf