From now on, National Pension System (NPS) pensioners will not have to fill any separate form to buy annuity from NPS income at the time of retirement. The Insurance Regulatory and Development Authority of India (IRDA) has said that it has relaxed the requirement for the same and is aimed at providing ease of doing business in the insurance industry to protect the interests of policyholders.
“In this direction, to make the lives of senior citizens easier, IRDA has relaxed the requirement of submission of separate proposal form for availing immediate annuity products from the income of National Pension Scheme (NPS),” irdai Said in a circular.
Currently, NPS retirees have to submit an exit form to PFRDA and a proposal form to the insurers at the time of retirement.
“Exit Form Submitted by NPS Offer of immediate annuity product by insurance companies should be treated as offer form to retiree,” IRDAI said in its circular dated September 13, 2022.
The circular comes into force with immediate effect, IRDA said.
Submit life certificate digitally
The insurance regulator has asked insurers to adopt Aadhaar-based authentication for verification of life certificates, such as Jeevan Pramaan, a government initiative on a biometric-enabled digital service.
What does this mean for pensioners? Will senior citizens benefit?
Pensioners will no longer be required to fill up a separate proposal form to decide on annuity after exit from the pension fund.
According to industry experts, this will benefit senior citizen NPS subscribers.
Who provides annuity to NPS subscribers?
As per PFRDA rules, at least 40 per cent of the accumulated pension amount of the subscriber is to be utilized for the purchase of annuity providing monthly pension to the subscriber and the remaining amount is to be paid as lump sum.
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