Subscribers of National Pension System and pensioners should note a host of changes the Pension Fund Regulatory and Development Authority (PFRDA) and the Insurance Regulatory and Development Authority of India (IRDAI) have recently introduced. The PFRDA intermediaries have cut down the timelines of various transactions under the scheme in a bid to provide a better subscriber experience. As per the new rule, the timeline for execution of withdrawal requests under the NPS account has been reduced to T+2 from a T+4 basis. 'T' here stands for the day of authorisation of withdrawal request by the Nodal office/PoP/subscriber, whereas the number '2' is the settlement days.
Till recent times, the pensioners would have to wait for the day of authorisation of withdrawal request plus four days for settlement of the transaction. Now, the execution will be faster under the NPS account.
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As per a notification of PFRDA: "The intermediaries of PFRDA viz Central Recordkeeping Agencies (CRAs), Pension Funds (PFs) and Custodian have improved the system interface and enhanced their IT capabilities to reduce the timelines of various transactions under NPS for providing better subscriber experience to fulfill their evolving needs."
It added: “The withdrawal requests of Subscribers at the time of exit were hitherto executed on T+4 working/settlement days...and the timeline has been reduced to T+2.”
The pensioners and investors who can benefit from the reduction in the timeline are those who are associated with Protean eGov Technologies Ltd CRA, and KFin Technologies Ltd & CAMS CRAs.
Other tweaked rules
E-nomination process flow to change from October 1
The process flow of e-nomination for both government and corporate sector subscribers has also been updated recently. According to the new update, the nodal office will have an option to either accept or reject the e-nomination request once it comes to them.
In case, the nodal office fails to process the request within 30 days after it is filed, the request will be directly accepted in the Central Recordkeeping Agencies (CRA) system. The revised e-nomination process flow will be effective from October 1, 2022. All subscribers will have to make a nomination in the prescribed form when they sign up for the pension scheme.
Life certificate submission online
From now on, NPS subscribers can submit life-certificate digitally. IRDAI has told insurers to adopt Aadhaar-based authentication for verification of life certificate, such as Jeevan Pramaan, a Government of India initiative on biometric enabled digital service. Following which, the signature to the survival certificate can be taken through biometric based digital means.
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No separate form to buy an annuity plan
IRDAI has also relaxed the requirement of submitting a separate proposal form for buying annuity products at maturity. Before this, subscribers need to submit an exit form to PFRDA and a detailed proposal form to the life insurance company for buying an annuity plan to receive pension. But the process has been simplified. Now, the exit form of NPS will be treated as the proposal form to buy annuities from life insurance companies.
No credit card payment
The PFRDA also said that NPS tier-2 account holders won’t be allowed to contribute through credit card. The rule has been applicable since August 3, 2022. In a circular, the authority said that all PoPs are advised to stop the acceptance of credit cards as a mode of payment for the Tier-II account of NPS. However, tier-1 account holders can make the payment through credit cards.
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