What Happens to Your NPS Account After Your Death?

The National Pension System (NPS) offers a secure and reliable way to save for retirement. However, what happens to your NPS account in the unfortunate event of your death? This guide will provide a comprehensive overview of the procedures and regulations governing NPS accounts after the subscriber’s demise.

Understanding NPS Death Benefits

Upon the death of an NPS subscriber, the accumulated pension wealth (100% of the NPS corpus) is distributed to the designated nominees or legal heirs. This ensures that the subscriber’s family receives financial support even after their passing.

Claiming Death Benefits

To claim death benefits, the nominee or legal heir must submit the following documents:

  • Death Certificate of the deceased subscriber
  • KYC Documents (Identity & Address Proof)
  • Bank Account Proof
  • Duly filled-up Death Withdrawal Form

The Death Withdrawal Form can be downloaded from the NPS CRA website under the “Forms” section within the “All Citizens of India” sector.

Processing Death Withdrawal Requests

The nominee or legal heir should submit the Death Withdrawal Form along with the required documents to the associated Point of Presence (POP) of the deceased subscriber. The POP will then process the request online in the CRA system.

Once the request is processed, the funds will be transferred to the nominee/claimant’s bank account within the stipulated timeframe. If an annuity option is chosen, the claimant’s details will be shared with the Annuity Service Provider (ASP) for further processing.

Receiving Withdrawal Proceeds

The withdrawal proceeds are electronically credited to the nominee/claimant’s bank account as provided during the online withdrawal request initiation.

Handling Cases with Multiple Nominees

If multiple nominees are registered in the CRA system, the following scenarios apply:

  • All nominees must submit the Death Withdrawal Form.
  • If any nominee does not wish to claim the NPS corpus, they must submit a Relinquishment Deed.
  • The nominee claiming the benefits must submit an Indemnity Bond.

Formats for the Relinquishment Deed and Indemnity Bond are available under the “Forms” section on the NPS CRA website.

Handling Cases with No Registered Nominee

In the absence of a registered nominee, the accumulated pension wealth will be distributed to the family members based on the legal heir certificate issued by the state’s revenue authorities or a succession certificate issued by a court of competent jurisdiction.

Understanding Annuities

An annuity refers to a monthly sum received by the claimant from the Annuity Service Provider (ASP). A portion of the pension wealth, as determined by the claimant, is used to purchase an annuity from an empaneled ASP.

Choosing an Annuity Service Provider (ASP)

Indian Life Insurance companies licensed by the Insurance Regulatory and Development Authority (IRDA) can act as ASPs. However, they must be empaneled by PFRDA to provide annuity services to NPS subscribers.

The list of empaneled ASPs can be accessed on the NPS CRA website.

Checking Annuity Rates

Claimants can check annuity rates offered by different ASPs on the NPS CRA website. The amount of annuity received depends on the NPS corpus, the chosen ASP, and the claimant’s age.

Available Annuity Schemes

Common annuity schemes available to NPS subscribers include:

  • Annuity for Life with Return of Purchase Price: The subscriber receives an annuity for life, and upon their death, 100% of the purchase price is returned to the nominee(s).
  • Annuity for Life without Return of Purchase Price: The subscriber receives an annuity for life, but no further amount is payable upon their death.
  • Joint Life Annuity with Return of Purchase Price: The subscriber receives an annuity for life, and upon their death, the annuity is payable to the spouse for life. Upon the spouse’s death, 100% of the purchase price is returned to the nominee(s).
  • Joint Life Annuity without Return of Purchase Price: The subscriber receives an annuity for life, and upon their death, the annuity is payable to the spouse for life. Upon the spouse’s death, no further amount is payable.

Starting the Pension

If the nominee/legal heir opts for an annuity, the Annuity Service Provider (ASP) will issue the annuity policy. The annuitant’s details and scanned documents will be shared with the chosen ASP upon the execution of the withdrawal request in the CRA.

If the documents are correct, the ASP will issue the annuity policy. If additional documents are required, the ASP will contact the claimant.

Once the formalities are completed, the ASP will confirm the annuity request in the CRA system, and the funds will be transferred to the ASP for issuing the annuity within the stipulated timeframe. The ASP will then issue the annuity policy to the family members within two working days of receiving the funds.

Understanding the procedures and regulations governing NPS accounts after the subscriber’s death is crucial for ensuring a smooth and timely distribution of benefits to the designated beneficiaries. By following the guidelines outlined in this guide, nominees and legal heirs can navigate the process effectively and receive the financial support they are entitled to.

National Pension System (NPS), which is run by the Pension Fund Regulatory & Development Authority (PFRDA)

The Pension Fund Regulatory Authority oversees the National Pension System (NPS). People have the freedom to choose their own pension fund and investment strategies. They can also watch as the value of their pension accumulates over time with compound interest until retirement. It is noteworthy that NPS offers nominees death benefits in the event of an untimely subscriber’s death, in addition to retirement benefits. You should be knowledgeable about NPS death benefits as a subscriber. Amit Sinha, Group Head of Social Security and Welfare at Protean eGov Technologies Limited (formerly NSDL eGovernance Infrastructure Limited), was exclusively interviewed. Based on that interview, the spokesperson has shared a comprehensive cheat sheet that covers NPS death benefits, the claim process, and much more.

The Death Withdrawal Form must be properly completed by the Nominee/Claimant and submitted with the necessary supporting documentation, including the Death Certificate of the Deceased Subscriber and KYC Documents (Identity A list of necessary documents can be found in the Death Withdrawal Form. The Death Withdrawal Form can be found on this website under the “Forms” section, which is accessible under the “All Citizens of India” category.

Regarding PFRDA (Exits However, when requesting a withdrawal of benefits from the deceased subscriber’s Permanent Retirement Account, the nominee or legal heir will have the opportunity to buy any of the annuities that are being offered upon exit, should they so choose. In the event that the nominee or legal heir desires an annuity (pension), they must indicate their choice of Annuity Service Provider (ASP) and Annuity Scheme on the Death Withdrawal Form.

Toll Free Number -1800 889 1030 of Atal Pension Yojana (New NPS-CRA toll-free number 1800 210 0080. The old number will be discontinued shortly.) Go Paperless Opt for an Email Annual Transaction Statement Click Here for Aadhaar Seeding of APY Subscribers Are you interested in undergoing online training on NPS/APY(including central/state/autonomous body subscriber), if so please Click Here As per PFRDA guidelines, contribution payment in NPS Tier II A/c through Credit Card is not permitted. Use other modes of payment such as Net Banking/ Debit Card / UPI for contributing in Tier II. You can view your NPS Transactions in Consolidated Account Statement (CAS) shared by your Depository i.e. NSDL and CDSL. To add NPS Transactions in your CAS, Click Here.  

If the subscriber died without registering the nomination before passing away, the family members will receive the accumulated pension wealth based on the succession certificate issued by a court with appropriate jurisdiction or the legal heir certificate issued by the state’s revenue authorities.

After the annuity procedures are finished, ASP will verify the online annuity request in the CRA system, and funds (the annuity corpus) will be sent to ASP so that the claimant can receive the annuity within the allotted time frames. After receiving the funds at their end, ASP will provide family members with an annuity policy within T 2 working days. © Copyright 2017 Protean eGov Technologies Limited.

What happens to my annuity after I die?

FAQ

What is the process of NPS withdrawal after death?

The Nominee/Claimant is required to submit duly filled-up Death Withdrawal Form alongwith supporting documents such as [Death Certificate deceased Subscriber, KYC Documents (Identity & Address Proof), Bank Account Proof and other required documents]. The list of documents required is given in Death Withdrawal Form.

What happens to pension after death?

But what happens to your pension if you die before you retire? When you initially enroll in your employer’s pension plan, you’ll be asked to name a beneficiary. The beneficiary is the person who will receive your pension when you die.

What happens to annuity in NPS?

What Happens to NPS at Maturity? On maturity, individuals can withdraw up to 60% of the accumulated corpus tax-free. They must invest the remaining 40% in an annuity plan to receive a regular income for the rest of their life.

When can NPS be withdrawn?

Once an investor turns 60, up to 60% of the corpus in Tier I accounts can be withdrawn as a lump sum. The remaining 40% has to be used to buy annuity products that will be used to pay post-retirement pension. However, in case the pension corpus is less than Rs.

Does NPs have a death benefit?

Yes, NPS (National Pension System) has a death benefit in the form of a lump sum payment to the nominee or legal heir of the subscriber in case of the subscriber’s death. What happens in the case of the death of a subscriber before exit from NPS?

Is it possible to die due to sleep paralysis?

No, you cannot die directly from sleep paralysis itself. Sleep paralysis is a temporary inability to move or speak while falling asleep or waking up. However, it can be accompanied by frightening hallucinations or a feeling of suffocation. While these experiences can be distressing, they are not life-threatening. If you consistently experience sleep paralysis or it causes severe anxiety, consult a healthcare professional for guidance.

What if NPS subscriber dies?

In case of death of NPS Subscriber, it is mandatory for the family members (Spouse/Mother/Father of deceased Subscriber) to select Default Annuity Scheme i.e. NPS Family Income Scheme, if NPS Corpus of the Subscriber is more than Rs. 5 lakh as on Date of Death of the Subscriber. Q9.

How do I claim a death in NPS?

To claim an NPS death claim, the nominee or legal heir of the subscriber needs to submit a claim form along with the required documents, such as the death certificate, identity proof, and bank account details. Does NPS give a lifetime pension? Yes, NPS provides a lifetime pension to the subscriber in the form of an annuity.

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