Want to subscribe to National Payment System? 5 recent rule changes you should know
A voluntary retirement pension scheme, NPS enables its subscribers to make decisions regarding their post-retirement life, through systematic savings while they are actively employed.
The National Pension System (NPS) is a voluntary pension scheme, under which investors can go for both debt and equity exposure via a single investment tool. Under NPS, an investor, at the time of retirement, can choose up to 75% equity exposure and withdraw up to 60% of the maturity amount. The remaining 40% will be used to buy annuity, which will be used for monthly pension payable to NPS account holders.
Recently, the Pension Fund Regulatory Development Authority (PFRDA) and Insurance Regulatory and Development Authority of India (IRDAI) announced some changes to NPS rules. Here are 5 updated rules subscribers should know about:
Trail commission payment through PoP: This rule became effective from September 1. Under this, the trail commission to Points of Presence (PoPs) for D-Remit contributions of the associated subscribers shall be 20% of the contribution amount. As with eNPS, the contribution amount is between ₹15 and maximum ₹15,000, including the lower and upper limits.
e-nomination flow: Starting October 1, the nodal office can accept or reject e-nomination request of an account holder. The request will be automatically accepted in the Central Recordkeeping Agencies (CRA) system if the nodal office does not initiate any action on the request within 30 days of allotment.
Buy annuity with the same form: Now, at the time of maturity, no separate form is required for annuity, and, instead, exit from NPS will be considered as proposal to buy annuities from life insurance companies. IRDAI has taken this step to make the onboarding process easier for new subscribers to this voluntary retirement scheme.
Submitting life certificate digitally: To ease submission process, IRDAI has directed insurance firms to use Aadhaar-based authentication.
No credit card payment for tier-2 account holders: PFRDA has stopped the use of credit cards to pay for subscription of NPS contribution in tier-2 accounts.