How to claim stuck NPS funds with interest? Step-by-step guide for subscribers

Unclaimed contributions under the National Pension System (NPS) can be retrieved, even after a prolonged period. The Pension Fund Regulatory and Development Authority (PFRDA) has specified a mechanism through which subscribers can claim amounts stuck in the Subscribers’ Pension Contribution Protection Account (SPCPA).

SPCPA is maintained by PFRDA to hold unclaimed or unreconciled contributions. These are amounts that were deposited with point of presences (PoPs) but were not credited to the subscriber’s Permanent Retirement Account Number (PRAN).

Who can apply for a refund?

According to PFRDA, if a NPS subscriber had made a contribution in the past through a PoP but the amount was not credited to their PRAN, or the PRAN was not generated, they can claim a refund.

The request can be submitted either directly to the regulatory body or through the concerned PoP-NPS.

As per guidelines issued by PFRDA, unclaimed or unreconciled NPS contributions are moved to the SPCPA if they remain unclaimed for more than seven years. In certain cases, the transfer may take place earlier, even as when the registration of the intermediary handling the contribution is cancelled or expires.

What is the process for claiming a refund?

Here is the detailed process of claiming a refund that is outlined by PFRDA in an official release:

• Filing a claim: Subscribers can apply for a refund directly with the PFRDA or through the intermediary within 25 years from the date the amount was transferred to the account. They also need to provide supporting documents.
• Verification process: After receiving the request, PFRDA will scrutinize the documents and legitimacy of the claim as per the available records in its custody. However, in case of any discrepancy in the documents, PFRDA may refer the claim to the intermediary for verification.
• If filed via PoP: If the claim request is received by the PoP-NPS, they shall forward the claim to PFRDA, along with the supporting documents.
• Approval: After scrutiny of the subscriber’s claim, PFRDA may approve the refund from the account.
• Refund amount: The subscriber receives the deposited contribution along with any compensation recovered from the intermediary.
• Interest payout: Further, interest shall be paid at the rate determined by the authority, for the period in which the funds were lying in the account.
• Mode of payment: The refund amount shall be directly credited to the subscriber’s saving bank account.

Why claimants should check?

Subscribers who have contributed in NPS in the past, particularly through intermediaries, may not always know where those amounts were credited correctly. Hence, going through past records and verifying account details can help identify any discrepancies and enable recovery of funds that might otherwise remain unclaimed.

NPS is a government-backed retirement savings scheme regulated by PFRDA. It allows individuals to invest regularly during their working years to build a retirement corpus, with funds allocated across equity, corporate bonds, and government securities. NPS offers tax benefits under the Income Tax Act and provides market-linked returns, making it a long-term investment option. At retirement, a portion of the corpus can be withdrawn as a lump sum, while the remaining amount is used to purchase an annuity.