NPS scheme: The National Pension System (NPS) is a voluntary pension scheme that gives an opportunity to the investors to go for both debt and equity exposure via single investment tool. In NPS scheme, an investor can choose up to 75 per cent equity exposure and can withdraw up to 60 per cent of the maturity amount at the time of retirement. Rest 40 per cent will be used for buying annuity, which will be used for monthly pension payable to the NPS account holders.
Recently, pension regulator Pension Fund Regulatory and Development Authority (PFRDA) has allowed some changes in NPS rules. Here we list out top 5 changes in NPS rules that NPS accountholders should know:
1] Trail commission payment through PoP: To support the Points of Presence (POPs), the Pension Fund Regulatory and Development Authority (PFRDA) has allowed trail commission payment through POPs for the NPS account holders. However, the pension fund regulator made it clear that trail commission on NPS contributions made through D-Remit will be similar to eNPS (other mode of Online contribution) by those subscribers who were on-boarded by the respective PoPs. The rule has become effective from 1st September 2022.
"The trail commission to PoPs for D-Remit Contributions of the associated Subscribers shall be @ 0.20% of the contribution amount (Minimum ₹15 and Maximum ₹10,000) similar to eNPS. The applicable charges would be recovered by unit deduction on periodical basis," PFRDA said.
2] NPS e-nomination flow: The PFRDA has recently changed the process for e-nomination for both government and private or corporate sector employees. The change will become effective from 1st October 2022. As per the new NPS e-nomination process flow, the nodal office will have an option to either accept or reject the e-nomination request of the NPS account holder. In case, the nodal office does not initiate any action against the request within 30 days of its allotment, the e-nomination request will be accepted in the Central Recordkeeping Agencies (CRA) system.
3] No separate form for annuity buy: No at the time of maturity, no separate form will be required for annuity buying. The IRDAI has taken this decision to relax the onboarding process for NPS subscribers. Now, exit from the NPS scheme will be considered as proposal for buying annuity from life insurance companies.
4] Submission of digital life certificate: The IRDAI has asked insurance companies to ease the life certificate submission process. It has asked insurance companies to follow Aadhaar-based authentication or verification of life certificate.
5] No credit card payment for tier-2 account holders: The PFRDA has decided to stop the facility of payment of subscription of NPS contribution in tier-2 accounts. The PFRDA made its decision public through an official notification dated 3rd August 2022. So, after this payment from credit card for tier-2 account is no more available for the NPS account holders.
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