PFRDA allows 6 life insurance companies to provide annuity

PFRDA allows 6 life insurance companies to provide annuity

New Delhi: The Pension Fund Regulatory and Development Authority has permitted six life insurance companies to offer annuity services to subscribers of the national pension system (NPS).

PFRDA administers the pension scheme for central and state government employees as well as for the unorganised sector.

The regulator has permitted state-owned Life Insurance Corporation of India, and five private life insurance companies--SBI Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd, Bajaj Allianz Life Insurance Co. Ltd, Star Union Dai-ichi Life Insurance Co. Ltd and Reliance Life Insurance Co. Ltd--to provide annuity services, the government said in a statement.

As per current regulations, the conversion of the accumulated savings into a monthly income stream can only be done by a life insurance company.

NPS subscribers, while exiting the scheme after attaining 60 years of age, can withdraw 60% of the corpus, but have to necessarily utilise the remaining 40% for purchasing annuity. Subscribers can now choose from any of the six annuity service providers and the various schemes they offer, the statement said.