NPS Rule Change: IRDAI Eases Annuities Purchasing Rules For Retirees, Allows Digital Life Certificate

Insurers have been advised to adopt Aadhar-based authentication for verification of life certificate, such as Jeevan Pramaan, a government initiative on biometric-enabled digital service

The Annuity Service Providers are insurance companies regulated by Irdai and empaneled by the PFRDA to provide the annuity to the NPS subscribers from the bouquet of annuities offered by them.

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From now on, the National Pension System (NPS) pensioners don’t have to fill any separate proposal form for taking the Immediate Annuity products from the proceeds of the scheme. As of now, NPS retirees were required to submit an exit form to NPS and a proposal form to insurers at the time of retirement.

Insurance Regulatory and Development Authority of India (Irdai) on Tuesday announced the move in a circular on September 13.  “In this direction, to bring ease of living for senior citizens, Irdai has relaxed the requirement of submitting separate proposal form for taking the immediate annuity products from proceeds of National Pension System (NPS),” Irdai said in a circular, reported news agency PTI. The edit form of NPS will be treated as a proposal form for purchasing annuity, thereby reducing the time and effort of senior citizens and insurers.

In order to promote the adoption of technology, insurers have been advised to adopt Aadhar-based authentication for verification of life certificate, such as Jeevan Pramaan, a Government of India (GoI) initiative on biometric-enabled digital service.

What does it mean for retirees?

Pensioners will no longer need to fill a separate proposal form to decide on the annuity after exiting the pension corpus.  The measure is aimed at providing ease of doing business in the insurance industry and protecting of interests of policyholders, the insurance regulator said, according to the PTI.

The current framework of Aadhar-based authentication for life verification certification, such as Jeevan Praman, a Govt. of India initiative on biometric enabled digital service for all pensioners will facilitate ease of living for senior citizens receiving annuity payments. 

The Annuity Service Providers (ASPs) are insurance companies regulated by Irdai and empaneled by the PFRDA to provide the annuity to the NPS subscribers from the bouquet of annuities offered by them.

They are responsible for providing a monthly annuity pension to the subscribers. While the Pension Fund Regulatory and Development Authority has pension fund managers under the NPS who are in charge of investing the pension corpus of the subscribers in a judicious and prudent manner.