Railway Accounts (रेलवे लेखा): New Pension System (Brief about NPS Exit Facility)

What is Annuity, ASP and Annuity Scheme under NPS Exit Option?How many withdrawal types are available in NPS? Briefly describe the process of withdrawal from NPS?

Annuity:

In the context of NPS, Annuity refers to the monthly sum received by the Subscriber from the Annuity Service Provider (ASP). A percentage of the pension wealth as decided by the Subscribers (minimum 40% & 80% in case of Superannuation & Pre-mature Exit respectively) is utilized for purchase of Annuity from the empanelled Annuity Service Providers.

Annuity Service Provider:

Annuity Service Providers (ASPs) are responsible for providing a regular monthly pension to the Subscriber after exit from the NPS. These ASPs are basically Insurance Regulatory and Development Authority (IRDA) regulated Insurance companies which are empaneled by PFRDA to provide Annuity services to the NPS Subscribers.

Change in ASP:

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 (free look period as provided in terms of the Annuity contract or specifically provided by the IRDA) by the Annuity Service Provider.

Annuity Scheme:

Following schemes are available with ASPs under NPS:

1. Annuity for life– On death of the annuitant, payment of Annuity ceases.

2. Annuity for life with return of purchase price on death– On death of the annuitant, payment of Annuity ceases and the purchase price is returned to the nominee

3. Annuity payable for life with 100% Annuity payable to spouse on death of annuitant– On death of the annuitant, Annuity is paid to the spouse during life time. If the spouse predeceases the annuitant, payment of Annuity will cease after the death of the annuitant.

4. Annuity payable for life with 100% Annuity payable to spouse on death of annuitant with return on purchase of Annuity– On death of the annuitant, Annuity is paid to the spouse during life time and purchase price is returned to the nominee after the death of the spouse.

Tentative Pension Amount:

The pension amount can be calculated based on indicative annuity rates (subject to change from time to time) provided by ASPs. However, the actual annuity amount will depend on the prevailing rates at the time of purchase of annuity. You may visit "Annuity Service Provider (ASP)" page on our website to get the tentative pension amount. Alternatively, you may also visit the respective ASP's website to the tentative pension amount.

Start of Pension:

In case of pre-mature exit, pension starts immediately, if Subscriber fulfils the Age and Corpus criteria for purchasing Annuity (depending upon choice of ASP and Annuity scheme of the respective Annuity Service Provider).

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Partial Withdrawal:

A subscriber can make partial withdrawal after joining the NPS after 10 years, not exceeding twenty-five per cent of the contributions made by him/her and excluding contribution made by employer, if any, at any time before exit from National Pension System subject to the terms and conditions, purpose, frequency and limits specified under Regulations 8 of PFRDA (Exits & Withdrawals under the NPS), Regulations, 2015. The guidelines for partial withdrawal can be accessed at following link: https://www.npscra.nsdl.co.in/download/Annexure_PFRDA_Circular_CRA_PO_RI_Master_2016_003.pdf

Conditions:

i. Subscriber should be in NPS at-least for 3 years

ii. Withdrawal amount will not exceed 25% of the contributions made by the Subscriber

iii. Withdrawal can happen maximum of three times during the entire tenure of subscription.

iv. Withdrawal is allowed only against the specified reasons, for example;

§ Higher education of children

§ Marriage of children

§ For the purchase/construction of residential house (in specified conditions)

§ For treatment of Critical illnesses

Process

Partial withdrawal request can be initiated online by Subscriber. Alternatively, Subscriber can submit physical partial withdrawal form (601-PW) along with documents to POP, based on which POP can initiate online request.. However, POP is required to ‘Authorize’ the Withdrawal request in CRA system.

Payment

The Withdrawal proceeds are credited in Subscriber/Claimant bank account (as per the bank details provided at the time of initiating online Withdrawal request) through electronic mode only.

Status:
Subscriber can check Withdrawal status as per below mentioned option:

1. Subscriber can check through the ‘Limited Access View’ (Pre Login) functionality which is available at home page of CRA website (www.cra-nsdl.com).

2. Subscriber can also check the status under the menu ‘Exit Withdrawal Request’>>'Withdrawal Request Status View’ through their NPS account log-in.

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Final Withdrawal/Exit Withdrawal:

Exit Means: An exit is defined as closure of individual pension account of the subscriber under National Pension System.

Condition:

As per PFRDA (Exits & Withdrawals under NPS) Regulations 2015, in following conditions Subscriber can exit from NPS:

a. Upon Superannuation - When a subscriber reaches the age of Superannuation/attaining 60 years of age, he or she will have to use at least 40% of accumulated pension corpus to purchase an annuity that would provide a regular monthly pension. The remaining funds can be withdrawn as lump sum.
If the total accumulated pension corpus is less than or equal to Rs. 2 lakh, Subscriber can optfor 100% lumpsum withdrawal.

b. Pre-mature Exit - In case of pre-mature exit (exit before attaining the age of superannuation/attaining 60 years of age) from NPS, at least 80% of the accumulated pension corpus of the Subscriber has to be utilized for purchase of an Annuity that would provide a regular monthly pension. The remaining funds can be withdrawn as lump sum. However, you can exit from NPS only after completion of 10 years.
If the total corpus is less than or equal to Rs. 1 lakh, Subscriber can opt for 100% lump sum withdrawal.

c. Upon Death of Subscriber - The entire accumulated pension corpus (100%) would be paid to the nominee/legal heir of the subscriber.

Options for Subscriber:

Subscriber can decide to remain invested in NPS (Up to 70 years) or can exit from NPS. Following options are available to NPS Subscribers:

I. Continuation of NPS account:
Subscriber can continue to contribute to NPS account beyond the age of 60 years/superannuation (Up to 70 years). This contribution beyond 60 is also eligible for exclusive tax benefits under NPS.

II. Deferment (Annuity as well as Lump sum amount):
Subscriber can defer Withdrawal and stay invested in NPS up to 70 years of age. Subscriber can defer only lump sum Withdrawal, defer only Annuity or defer both lump sum as well as Annuity.

III. Start your Pension:
If Subscriber does not wish to continue/defer NPS account, he/she can exit from NPS. He/she can initiate exit request online and asper NPS exit guidelines start receiving pension.

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Forms:

You can find the withdrawal form of respective sector from "Form" section available on this website. Based on the different types of Withdrawal request, following forms are made available:

I. Superannuation

II. Premature

III. Death

Process

For any superannuating subscriber/subscriber attaining 60 years of age, CRA generates a Claim ID six months prior to the date of superannuation or 60 years of age. CRA intimates the generation of Claim ID to the subscriber vides e-mails, letters, SMS.

In case of Superannuation, CRA generates a Claim ID six months prior to the date of superannuation or 60 years of age. Claim ID is intimated to the subscriber vides e-mails, letters, SMS. Intimation of claim ID enable Subscriber six months before to make any changes (like DOB, address etc.) in his/her NPS account before initiating withdrawal request. Withdrawal request cannot be raised without generation of Claim ID.

In case of Pre-mature Exit, the Subscriber needs to contact the POP for generation of Claim ID for Withdrawal of NPS funds. Generation of Claim ID is not required if Withdrawal request is initiated by POP.

Generation of Claim ID is not required to process death online Withdrawal request. POP can directly raise the Withdrawal request for death cases.

Subscriber can initiate Online Withdrawal request through their NPS account log-in. Such request needs to be verified and authorized by the associated POP. In case Subscriber is not able to initiate online Withdrawal request, he or she needs to submit the physical Withdrawal form along with the required documents to the POP. Based on Subscriber's request, POP will initiate the online Withdrawal request on behalf of the Subscriber.

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Documents Required :

In case of Superannuation & Pre-mature Exit: Following documents are required to be submitted along with the duly filled Withdrawal form for Superannuation & Pre-mature Exit:

I. Original PRAN card

II. Advanced stamped receipt, to be duly filled and cross-signed on the Revenue stamp by the Subscriber.

III. KYC documents (address and photo-id proof)

IV. ‘Cancelled Cheque’ (having Subscriber’s Name, Bank Account Number and IFS Code) or ‘Bank Certificate’ on Bank Letterhead having Subscriber’s name, Bank Account Number and IFS Code required to be submitted as bank proof. ‘Copy of Bank Passbook’ can be accepted, however, it should have Subscriber’s photograph, Name and IFS Code on it and should be self-attested by the Subscriber.

V. "Request Cum Undertaking" form if eligible for complete Withdrawal.

After submitting required documents, POP will authorize the Withdrawal request.

In case of exit on Death: Following documents are required to be submitted from the nominee/claimant along with the completely filled Withdrawal forms:

I. Original PRAN card

II. Advanced stamped receipt to be duly filled and cross-signed on the Revenue stamp by the Claimant.

III. KYC documents (address and photo-id proof)

IV. ‘Cancelled Cheque’ (having claimant’s Name, Bank Account Number and IFS Code) or ‘Bank Certificate’ on Bank Letterhead having claimant’s name, Bank Account Number and IFS Code required to be submitted as bank proof. ‘Copy of Bank Passbook’ can be accepted, however, it should have claimant’s photograph, Name and Bank IFS Code on it and should be self-attested by the claimant.

V. Original Death Certificate issued by the Registrar of birth and death

After obtaining required documents, POP needs to capture the online Withdrawal request. Once authorized by the checker ID, POP will send the Withdrawal form & supporting documents with covering letter to CRA for storage purpose.

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Claim Percentage :

A subscriber can claim withdrawal in following cases:
In case of Superannuation- A Subscriber can claim 100% Withdrawal if the total accumulated corpus is less than or equal to Rs. 2 Lakh at the time of Superannuation/attaining age of 60 years.

In case of Pre-mature Exit- If total accumulated corpus is less than or equal to Rs. 1 Lakh, the Subscriber can avail the option of complete Withdrawal. However, you can exit from NPS only after completion of 10 years.

Cases for Nominee:

Such Withdrawal request will be processed as per below mentioned scenario:

1. Withdrawal form needs to be submitted by all the nominees registered in CRA system.

2. If any nominee/s doesn’t not want to claim the NPS corpus:

i. Relinquishment deed (on Rs 100 stamp paper, notaries) is to be submitted by the nominee/s who doesn’t want to claim the NPS benefits.

ii. Indemnity Bond (on Rs 100 stamp paper, notaries) is to be submitted by the nominee who is claiming the NPS benefits.

3. In case one nominee is a major and other is a minor,

i. Major nominee will submit Withdrawal form.

ii. Guardian (on behalf of minor) will submit the Withdrawal form along with the birth proof of the minor.

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Useful Abbreviations in NPS

ACRONYM	DESCRIPTION
CRA	Central Recordkeeping Agency
ERM	Error Rectification Module
GOI	Government of India
I-PIN	Internet Personal Identification Number
NPS	National Pension System
NSDL	National Securities Depository Limited
PFRDA	Pension Fund Regulatory & Development Authority
POP	Point of Presence
POP-SP	Point of Presence-Service Provider
PRAN	Permanent Retirement Account Number
TS	Transaction Statement
PFM	Pension Fund Managers
SCF	Subscriber Contribution File
PRAN	Permanent Retirement Account Number

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Pictorial Flow for Withdrawal Request by Subscriber:

Step 1 : Open site by using https://cra-nsdl.com/CRA/ and login as subscriber.

Step 2 : After login following steps to be followed.

1. Click on Transact Online

2. Click on Withdrawal

3. Clikc on Withdrawal from Tier 2

Step 3 : After clicking on Sr No 3 of Step-2, the following screen will appear. Here select any type of withdrawal from ‘Withdrawal Due To’ option and after that follow as instruction/option available.