IRDAI made the announcement about immediate annuity products via a circular dated September 13, 2022.
Benefits of parallel processing of exit and annuity components
At the time of withdrawal, NPS pensioners are currently required to submit an “elaborative” exit form to the Pension Fund Regulatory and Development Authority (PFRDA). Once they have decided on their preferred annuity plans, they must fill out a thorough proposal form provided by the insurance companies.
According to the PFRDA circular dated November 14, 2022, the benefits of the coordinated action by both financial regulators are manifold towards the benefit of Subscribers & stakeholders as described below:
a. Ease of Annuity and speed of its issuance
b. Parallel Processing of Lump sum payment and Annuity issuance
c. Payment of Retirement Income through Annuity immediately after one’ s retirement and hence uninterrupted income flow to the retirees ensured.
d. Ease of Old Age Income Support.
e. Ease of doing business for the associated stake holders.
According to the PFRDA circular dated November 14, 2022, “All Subscribers are hereby informed that at the time of initiation of the exit request, the completely filled proposal form along with the specified supporting documents including KYC (Refer Page no. 5 of Annexure A) is to be uploaded in the respective CRA system through their login credentials.”
Also, PFRDA intends to make the upload of the Withdrawal form/document mandatory at a later time based on the response and feedback to the common proposal from the stakeholders and subscribers.
All senior citizens, including NPS Retirees who are receiving periodic annuity payments, will benefit from the provision of Aadhar-enabled authentication for life verification certification through Jeevan Praman (the Indian government’s initiative on biometric enabled digital services for pensioners), the circular added.