Till now retirees included in NPS had to submit a withdrawal form with the Pension Fund Regulatory and Development Authority (PFRDA) and a resolution form with the insurance companies.
New Delhi. The Insurance Regulatory and Development Authority of India (IRDA) on Tuesday said it has done away with the need to submit a separate form at the time of retirement to receive pension from the NPS (National Pension Scheme) amount. IRDA said that the purpose of this decision is to make it easier to do business in the insurance industry and to protect the interests of policyholders.
The regulator has given information about this by issuing a circular. Till now retirees included in NPS had to submit a withdrawal form with the Pension Fund Regulatory and Development Authority (PFRDA) and a resolution form with the insurance companies. IRDA said that now the withdrawal form of NPS will be treated as the proposal form for purchase of pension. This will facilitate senior citizens as well as insurance companies.
Who gives pension
insurance companies are the only pension service providers. These are regulated by the insurance regulator. These are listed by PFRDA. These companies give pension to NPS subscribers based on the amount deposited by them. There are managers handling the pension fund of PFRDA under NPS. They invest this fund in different options as per their discretion. As per the PFRDA norms, members will have to use at least 40 per cent of their accumulated pension corpus to purchase monthly pension products. Apart from this, the remaining amount can be taken in a lump sum.
What is NPS
It is a long term investment scheme which is protected by the central government. In this, people are encouraged to invest so that they can get a good pension and lump sum amount after retirement. Only armed forces cannot invest in this scheme. Talking about the returns, this is a market linked scheme, so the returns in it keep on changing but on an average, investors get an annual return of 8-10 percent. You can also get tax exemption by investing in it. You can start investing in this till the age of 50. NPS matures at the age of 60 years.
