NPS scheme: New rules, and documents required for pension withdrawal that you must know

About the announcement:

The Pension Fund Regulatory and Development Authority (PFRDA) issued a circular, mandating NPS subscribers to upload a few documents effective from 1 April 2023. The pension body mentioned that uploading these documents would ensure timely annuity income payments.

Documents to be Uploaded for Quick Distribution of Annuity Income:

As per the PFRDA's circular, certain withdrawal and KYC documents need to be uploaded for the parallel processing of exit and annuity.

The documents you need to upload include:

-NPS Withdrawal/Exit form

Identity and address proof, as mentioned in the Withdrawal form

-Proof of your bank account

-PRAN Card copy

Steps included in the processing of NPS withdrawal or exit request

Whether you've opted for the government NPS scheme or a corporate NPS scheme, you must follow these steps to exit from NPS.

1)You must log into the CRA system to initiate the online exit request.

2)Once you initiate the request, you will see relevant notifications about e-Sign/OTP authentication, Nodal Office/POP authorization, etc.

3) After you initiate the request from the NPS account, details such as your bank information, address, nominee details, etc. are auto-populated in the NPS withdrawal form.

4)You can choose the fund allocation percentage for annuity and withdrawable corpus, annuity details, etc.

5)Using the penny drop verification, your bank account will be verified online.

6)While submitting the exit request, you must upload KYC documents (identity and address proof), PRAN Card/ePRAN copy, and bank proof.

7)All scanned documents must be legible.

8)You can authorise the request using one of the following two options:

9)OTP Authentication - Different OTPs will be forwarded to your phone number and email ID.

10)e-Sign - You can e-Sign the request using your Aadhaar Card.

To exit from the National Pension System (NPS), you can withdraw from the pension scheme before or after reaching the retirement age of 60. Upon exit, you must utilise 40% of the accumulated amount to purchase an annuity from an Annuity Service Provider (ASP). The remaining amount can be withdrawn as a lump sum if it is less than Rs5 Lakhs.