THE GAZETTE OF INDIA
EXTRAORDINARY
PART III SECTION 4
PUBLISHED BY
AUTHORITY
PENSION FUND
REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
NEW DELHI, the
........, 2016
Draft Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) (First Amendment) Regulations, 2016.
No.PFRDA/12/RGL/139/9- In
exercise of the powers conferred by sub-section(1) of Section 52 read with
sub-clause(g), (h), and (i)of sub-section 2 of Section 52 of the Pension Fund Regulatory
and Development Authority Act, 2013 (Act No.23 of 2013), the Pension Fund Regulatory
and Development Authority hereby makes the following regulations to amend the Pension
Fund Regulatory and Development Authority(Exits and Withdrawals under the
National Pension System) Regulations, 2015 namely,-
- These regulations may be called the Pension Fund Regulatory and Development Authority(Exits and Withdrawals under the National Pension System) (First Amendment) Regulations, 2016.
- These shall come into force on the date of their publication in the official gazette.
- In the Pension Fund Regulatory and Development Authority(Exits and Withdrawals under the National Pension System) Regulations, 2015:-
(I) In regulation 2, in
sub-regulation (1), the following shall be added after sub-clause(j)-
(k) “Exit ” for the purpose of
this regulation shall mean closure of individual pension account of the
subscriber under National Pension System, upon and on the date of happening of
the following events, as may be applicable:
(i) a subscriber having superannuated/retired
from employment, as per the terms of such employment;
(ii) a subscriber having
attained the age of sixty years, and where so specifically permitted has not exercised
a choice in writing to continue to remain subscribed to such system by making contributions;
(iii) death of the subscriber
before attaining the age of superannuation, or the age of sixty years, or in
cases where an option has been exercised to continue to remain subscribed to a
certain age, before attaining such age;
(iv) voluntary closure of the
account by the subscriber, in cases where so permitted and on the date on which
such closure is effected in the system.
Provided that a subscriber
shall be deemed to have exited from National Pension System, in accordance with
sub-clause (i) to (iv) notwithstanding that no claims have been received by or
on behalf of the subscriber or such claims have been deferred by the subscriber
as may be permitted or such claims having being received are pending
settlement.
Provided further that where a
subscriber ceases to be in employment other than retirement or superannuation,
it shall not be treated as exit and he shall have the option to continue his individual
pension account if available under new employment or as voluntarily available.
(l) “deferment” shall mean the
postponement or deferment of claims or receiving benefits admissible to a
subscriber upon exit from National Pension System in accordance with and as permissible
in these regulations.
(II) Sub-clause (a) of
Regulation 3shall be substituted as follows –
3. Exit from National Pension
System for government sector subscribers.-A subscriber under the government
sector shall exit from the National Pension System in the manners specified hereunder,
namely:-
(a) Where the subscriber who,
upon attaining the age of superannuation as prescribed by the service rules
applicable to him or her, retires, then at least forty per cent. out of the
accumulated pension wealth of such subscriber shall be mandatorily utilized for
purchase of annuity providing for a monthly or any other periodical pension and
the balance of the accumulated pension wealth, after such utilization, shall be
paid to the subscriber in lump sum or he shall have a choice to collect such
remaining pension wealth in accordance with the other options specified by the Authority
from time to time, in the interest of the subscribers:
Provided that,-
(i) the following shall be the
default annuity contract that will be applicable and wherein the annuity
contract shall provide for annuity for life of the subscriber and his or her
spouse (if any) with provision for return of purchase price of the annuity and
upon the demise of such subscriber, the annuity be re-issued to the family
members in the order specified hereunder at a premium rate prevalent at the
time of purchase of such annuity by utilizing the purchase price required to be
returned under the annuity contract ( until all the family members in the order
specified below are covered) :
(a) living dependent mother of
the deceased subscriber;
(b) living dependent father of
the deceased subscriber.
After the coverage of all the
family members specified above, the purchase price shall be returned to the
surviving children of the subscriber and in the absence of children, the legal
heirs of the subscriber, as may be applicable; In the absence of or non-availability
of such a default annuity for any reason, the subscriber shall be required to exercise
the option for purchase of such annuity of his choice, within the then annuity types
or contracts made available by the annuity service providers empanelled by the Authority.
Further, a subscriber who
wishes to opt out of the default option mentioned above and wishes to choose
the annuity contract of his choice from the available annuity types or contracts
with the annuity service providers, shall be required to specifically opt for such
an option.
(ii) where the subscriber does
not desire to withdraw the balance amount, after purchase of mandatory annuity,
such subscriber shall have the option to defer the withdrawal of the lump sum
amount until he or she attains the age of seventy years, provided the
subscriber intimates his or her intention to do so in writing not less than
fifteen days prior to his attaining the age of superannuation to the Central
recordkeeping agency or National Pension System Trust or any other approved
intermediary or entity authorized by the Authority, in the specified form or in
any other manner specified by the Authority through guidelines or circulars:,
(iii) where the subscriber
desires to defer the purchase of annuity, he or she shall have the option to do
so for a maximum period of three years from the date of attainment of age of superannuation,
provided the subscriber intimates his or her intention to do so in writing in the
specified form or any other approved mode by the authority at least fifteen
days before the attainment of age of superannuation to the Central
recordkeeping agency or National Pension System Trust or an intermediary or
entity authorized by the Authority for this purpose. It shall be a condition
precedent to opt for such deferment of annuity purchase that in case if the
death of the subscriber occurs before such due date of purchase of an annuity after
the deferment, the annuity shall mandatorily be purchased by the spouse(if any)
providing for annuity for life of the spouse with provision for return of
purchase price of the annuity and upon the demise of such spouse be re-issued
to the family members in the order of preference provided hereunder at a
premium rate prevalent at the time of purchase of the annuity, utilizing the
purchase price required to be returned under the contract ( until all the members
given below are covered):-
(a) living dependent mother of
the deceased subscriber ;
(b) living dependent father of
the deceased subscriber.
After the coverage of all such
members, the purchase price shall be returned to the surviving children of the
subscriber and in absence of children legal heirs of the subscribers as
applicable;
(iv) where the subscriber
desires to defer the withdrawal of benefits available under National Pension
System, the subscriber shall be allowed to do so, provided the subscriber
agrees to bear the maintenance charges of the individual pension account/
Permanent Retirement Account, including the charges payable to the central
recordkeeping agency, pension fund, Trustee Bank or any other intermediary, as
may be applicable from time to time, failing which such deferment shall not be
allowed;
(v) where the accumulated
pension wealth in the Permanent Retirement Account of the subscriber is equal
to or less than a sum of two lakh rupees, or alimit to be specified by the Authority
basing on the instructions issued by the appropriate regulator on the minimum value
of annuities to be made available by the life insurers, the subscriber shall
have the option to withdraw the entire accumulated pension wealth without
purchasing annuity and upon such exercise of this option, the right of such
subscriber to receive any pension or other amount under the National Pension
System or from the government shall extinguish;
(b) where the subscriber who,
before attaining the age of superannuation prescribed by the service rules
applicable to him or her, voluntarily retires or exits, then at least eighty
per cent. out of the accumulated pension wealth of the subscriber shall
mandatorily be utilized for purchase of annuity and the balance of the
accumulated pension wealth, after such utilization, shall be paid to the
subscriber in lump sum or he shall have a choice to collect such remaining
pension wealth in accordance with the other options specified by the Authority
from time to time, in the interest of the subscribers:
Provided that such annuity
contract shall provide for annuity for life of the subscriber and his or her
spouse (if any) with provision for return of purchase price of the annuity and
upon the demise of such subscriber the annuity be re-issued to the family
members in the order specified hereunder at a premium rate prevalent at the
time of purchase of the annuity, utilizing the purchase price required to be
returned under the annuity contract (until all the members given below are
covered) :-
(i) living dependent mother of
the deceased subscriber ;
(ii) living dependent father
of the deceased subscriber.
After the coverage of all such
members, the purchase price shall be returned to the surviving children of the
subscriber and in absence of children, the legal heirs of the subscriber as may
be applicable; In the absence of or non-availability of such a default annuity
for any reason, the subscriber shall be required to exercise the option for
purchase of such annuity of his choice, within the then annuity types or
contracts made available by the annuity service providers empanelled by the
Authority.
Further, a subscriber who
wishes to opt out of the option mentioned above and wishes to choose the annuity
contract of his choice from the available annuity types or contracts with the annuity
service providers shall be required to specifically opt for such an option.
Provided that if the
accumulated pension wealth of the subscriber is more than one lakh rupees or a
limit to be specified by the Authorityfor the purpose but the age of the
subscriber is less than the minimum age required for purchasing any annuity
from any of the empanelled annuity service providers as chosen by such
subscriber, such subscriber shall continue to subscribe to the National Pension
System, until he or she attains the age of eligibility for purchase of any
annuity:
Provided further that if the
accumulated pension wealth of the subscriber is equal to or less than one lakh
rupees or a limit to be specified by the Authority basing on the instructions
issued by the appropriate regulator on the minimum value of annuities to be
made available by the life insurers, such subscriber shall have the option to
withdraw the entire accumulated pension wealth without purchasing any annuity
and upon such exercise of this option the right of the subscriber to receive
any pension or other amounts under the National Pension System shall extinguish
and any such exercise of this option by the subscriber, before the regulations
are notified, shall be deemed to have been made in accordance with this
regulation;
(c) where the subscriber who,
before attaining the age of superannuation, dies, then at least eighty percent
out of the accumulated pension wealth of the subscriber shall be mandatorily
utilized for purchase of annuity and balance pension wealth shall be paid as
lump sum or in another manner as opted by subscriber from among the options
made available by the authority from time to time to the nominee or nominees or
legal heirs, as the case may be, of such subscriber:
Provided that,-
(i) such annuity contract
shall provide for annuity for life of the spouse of the subscriber(if any) with
provision for return of purchase price of the annuity and upon the demise of
such spouse be re-issued to the family members in the order specified hereunder
at the premium rate prevalent at the time of purchase of the annuity, utilizing
the purchase price required to be returned under the contract (until all the
members given below are covered):-
(a). living dependent mother
of the deceased subscriber ;
(b) living dependent father of
the deceased subscriber .
After the coverage of all such
members, the purchase price shall be returned to the surviving children of the
subscriber and in absence of children, the legal heirs of the subscriber as applicable.
In the absence of or non-availability of such a default annuity for any reason,
the subscriber shall be required to exercise the option for purchase of such
annuity of his choice, within the then annuity types or contracts made
available by the annuity service providers empanelled by the Authority.
(ii) Provided further that if
the accumulated pension wealth in the permanent retirement account of the
subscriber at the time of his death is equal to or less than two lakh rupees or
a limit to be specified by the Authority basing on the instructions issued by
the appropriate regulator on the minimum value of annuities to be made
available by the life insurers, the nominee or legal heirs as the case may be,
shall have the option to withdraw the entire accumulated pension wealth without
requiring to purchase any annuity and upon such exercise of this option the
right of the family members to receive any pension or other amounts under the
National Pension System shall extinguish;
(III)(i) Proviso(i)
toSub-clause (a) of Regulation 4 shall be substituted as follows –
Provided that,-
(i) the subscriber can
continue to subscribe to the National Pension System beyond the age of sixty
years or the age of superannuation, so specified, by giving in writing or in
such form as may be specified,. Such option shall be exercised not less than
fifteen days prior to subscriber attaining the age of sixty years or age or
superannuation, as the case may be, to the National Pension System Trust or any
other intermediary or entity authorized by the Authority, of the age upto (but
not exceeding seventy years) which he would like to contribute to his
individual pension account. No option of deferment of collection of benefits shall
be admissible to such a subscriber. Notwithstanding such intimation, the
subscriber may exit at any point of time, from the National Pension System by
submitting a request in writing to the National Pension System Trust or any intermediary
or entity authorized by the Authority for this purpose ;
(ii) Proviso to sub-clause (b)
of Regulation 4 shall be substituted as follows Provided further that if the
accumulated pension wealth in the individual pension account of the subscriber
is equal to or less than one lakh rupees, or a limit to be specified by the
Authority basing on the instructions issued by the appropriate regulator on the
minimum value of annuities to be made available by the life insurers, such
subscriber shall have the option to withdraw the entire accumulated pension
wealth without purchasing any annuity;
(iii) proviso (ii) to
sub-clause (c) of clause (ii) of Regulation 4 shall be substituted as follows:
(ii) in case, the nomination
is not registered by the deceased subscriber before his death, the accumulated
pension wealth shall be paid to the family members on the basis of the legal
heir certificate issued by the competent authorities of the State concerned or
the succession certificate issued by a court of competent jurisdiction.
(IV) Sub-clause (b) of
Regulation 5 shall be substituted as follows:
(b) at any time, before
attaining the age of sixty years, subject however that at least eighty percent out
of the accumulated pension wealth shall be mandatorily utilized for purchase of
annuity and the balance of the accumulated pension wealth, after such
utilization shall be paid to the subscriber in lump sum orhe shall have a
choice to collect such remaining pension wealth in accordance with the other
options specified by the Authority from time to time, in the interest of the
subscribers: Provided that for a Swavalamban subscriber the annuity purchased
by utilizing the mandatory minimum of eighty percent out of the accumulated
pension wealth shall yield at least a monthly annuity or pension of one
thousand rupees per month, failing which the entire accumulated pension wealth
shall be annuitised in such a manner so as to yield at least a monthly annuity
or pension of one thousand rupees and balance if any thereafter shall be paid
as lump sum to the subscriber. However there shall be no implicit or explicit guarantee
that the annuity purchased even with entire accumulated pension wealth would yield
a monthly annuity or pension of one thousand rupees: Provided that subject to
the provisions of this clause, where the accumulated pension wealth does not
exceed one lakh rupeesor a limit to be specified by the Authority basing on the
instructions issued by the appropriate regulator on the minimum value of
annuities to be made available by the life insurers, the whole of the pension
wealth up to the limit so specified shall be paid to the subscribers who have
not availed any Swavalamban co-contribution, without any requirement of
annuitisation and further this provision shall be applicable to a subscriber
who has availed a Swavalamban co-contribution only if such subscriber has
continued in the scheme for a minimum period of twenty-five years;
Provided further that the
migration of Swavalamban subscriber or subscribers to any other pension scheme
of Government of India and as approved by the Authority shall not be deemed as
an exit and withdrawal for the purposes of these regulations.
(V) Regulation 6 is
substituted as follows and sub-regulation (e) and (h) are amended, new
sub-clauses (i) and (j) are included as below:
6. Conditions to apply for
exit and withdrawal.- A subscriber registered under the National Pension System
shall not exit there from, and no withdrawal from the accumulated pension wealth
in the Tier-1 of the Permanent Retirement Account of such subscriber shall be
permitted, except in the manner so specified under regulations 3,4, 5 and 8 and
further as mentioned hereunder, namely:-
e) If the subscriber or the
family members of the deceased subscriber, upon his death, avails the option of
additional relief on death or disability provided by the Government, the
Government shall have right to adjust or seek transfer of the entire
accumulated pension wealth of the subscriber to itself. The subscriber or
family members of the subscriber availing such benefit shall specifically and
unconditionally agree and undertake to transfer the entire accumulated pension
wealth to the Government, in lieu of enjoying or obtaining such additional
reliefs like family pension or disability pension or any other pensionary
benefit from such Government authority; With the release of such family pension
to the eligible family members of the deceased subscriber, the right to claim
any benefits under the National Pension System, by any person shall extinguish
thereuponincluding that of the rights of the nominee as recorded for the
purpose of benefits under national pension system..
(h) Upon exit of a subscriber
from National Pension System the tier-II account of the subscriber shall also
be closed and benefits paid to the subscriber or his nominees or legal heirs as
the case may be.
(ii) New sub-clause (i) to
Regulation 6 shall be added as follows:
(i) With respect to
subscribers who have not submitted the withdrawal application as is required
under regulation 7 and within one month from the date of attainment of the age of
sixty years or the age of normal superannuation as the case may be, for
withdrawal of benefits upon exit from national pension system, the accumulated
pension wealth in the account of such subscriber would be monetized and kept
separately as per the guidelines or directions issued by the Authority from
time to time for the purpose. The income earned from such safe keeping of the
monetized accumulated pension wealth of the subscriber shall form part of the
benefits that the subscriber is entitled under the National Pension System.
This shall also be applicable in case of such subscribers who have deferred the
withdrawal of benefits or have partly withdrawn the benefits and have not taken
the steps to completely withdraw the benefits as is required under the
regulations and or in the guidelines or directions issued by the Authority for
the purpose.
(iii) New sub-clause (j) to
Regulation 6 shall be added as follows:
(j) With respect to settlement
of claims arising out of the accumulated pension corpus of deceased
subscribers, where no valid nomination as specified in these regulations exist
on the date of death, the Authority may issue suitable directions in the
interest of subscribers for settlement of such claims in favour of the eligible
legal heirs of the deceased subscriber, upto a specified limit, by requiring
such heirs to submit such documents as may be specified.
(V) Regulation 7 shall be
substituted as follows: - –
7. Conditions of withdrawals
under National Pension System.-In general, a subscriber shall submit the
withdrawal application along with the required documents for the purpose of withdrawing
the benefits upon exit as provided in these regulations on or before the
expected date of exit from the national pension system to the national pension
system trust or the central recordkeeping agency acting on behalf of it or any
other entity authorized by the Authority. Central recordkeeping agency or
national pension system trust may on receipt of such an application for exit or withdrawal from a
subscriber in the specified form and subject to fulfillment of conditions so
specified, may allow exit or withdrawals from the National Pension System in
the mode and manner permitted under these regulations and guidelines,
circulars, orders or notifications issued by the Authority from time to time:
(VI) Regulation 9 shall be
substituted as follows:-–
9. Withdrawal process.- (1)
The National Pension System Trust or any other intermediary or entity
authorized by the Authority for the said purpose shall be responsible for processing,
authorizing and approving the withdrawal and exit claims lodged by the
subscriber in accordance with the provisions of the Act, regulations,
directions, guidelines issued by the authority and the Pension Fund Regulatory
and Development Authority (National Pension System Trust) Regulations, 2015,
where applicable. The National Pension System Trust shall frame and issue
suitable operational processes or guidelines including the exit or withdrawal forms
for facilitating withdrawals and Exit of subscribers from National Pension
System after approval from the Authority.
(VII) Regulation 10 shall be
substituted as follows:-–
10. Conditions of annuity
purchase upon exit.- (1) The subscriber, at the time of exit, shall mandatorily
purchase an annuity providing for a monthly or periodical annuity or pension as
specified in these regulations, excepting those cases where exempted or
provided otherwise and to the extent so exempted. Such annuity shall be
purchased from an annuity service provider who is empanelled by the Authority.
(VIII) In regulation 32, in
the proviso, the following shall be added after sub-clause (xi) as sub-clause
(xii) -In respect of
subscribers covered under sub-clause(c) of Regulation 3 and sub-clause(c) of Regulation
4, where no valid nomination exists in accordance with these regulations, at
the time of exit of such subscriber on account of death, the nomination, if any
existing in the records of such subscriber with his or her employer for the
purpose of receiving other admissible terminal benefits shall be treated as
nomination exercised for the purposes of receiving benefits under the National
Pension System. The employer shall send a confirmation of such nomination in
its records, to the National Pension System, while forwarding the claim for
processing.
(IX) Regulations 33 and 34
shall be omitted
(X) Regulation 35 shall be
substituted as follows:-
35. Providing bank account
details.- A subscriber seeking benefits upon exit or withdrawals as permitted
under these regulations shall provide the Bank details mandatorily apart from
copy of Aadhar card issued by Unique Identification Authority of India or a
copy of PAN card issued by Income-Tax Department, in order to have the facility
of credit of the eligible benefits directly in to the subscriber’s or claimants
Bank account as applicable.
(XI) Regulation 37 shall be
substituted as follows: –
37. Stoppage of last three
months deductions by employer.-The monthly contribution consisting of both the
employer and employee, as may be applicable and that is required to be deducted
for crediting to the subscribers account under the National Pension System by
the employers from the salary of such subscriber shall be stopped at least
three months prior to the date of superannuation, to ensure that the exit and
withdrawal of the subscriber from national pension system is seamless. The
employer shall pay such eligible contributions directly to the employee subscriber
along with the monthly salary or remuneration that such subscriber is eligible
to receive from the employer.
(XII) Regulation 39 shall be
substituted as follows: –
39. Power of the Authority to
issue directions and clarifications.-(1)The Authority shall have the power to
issue necessary directions, restricting the provisions relating to withdrawals
and exit, as the case may be, under these regulations for complying with any
requirements to move from any other pension or superannuation schemes or funds,
to the National Pension System.
(2) The Authority shall also
have the power to issue clarifications and guidelines in order to remove any
difficulties in the application or interpretation of any of the clauses of
these regulations or as may be deemed necessary in the interest of the
subscriber and orderly growth of National Pension System.
HEMANT G. CONTRACTOR
ADVT/
ORIGINAL ORDER
