Do you want to subscribe to the national payment system? 5 Recent Rule Changes You Should Know About
The national pension system (NPS) is a voluntary retirement scheme, under which investors can opt for exposure to both debt and equity through a single investment tool. Under the NPS, an investor, upon retirement, can choose up to 75% equity exposure and withdraw up to 60% of the amount at maturity. The remaining 40% will be used to purchase an annuity, which will be used for the monthly pension payable to NPS account holders.
Recently, the Pension Fund Regulatory Development Authority (PFRDA) and the Insurance Regulatory and Development Authority of India (IRDAI) announced some changes to NPS rules. Here are 5 updated rules for subscribers to know:
Trail commission payment via PoP: This rule went into effect on September 1. Under it, the point-of-presence (PoP) trailing commission for D-Remit contributions from associated subscribers will be 20% of the contribution amount. As for eNPS, the amount of the contribution is between ₹15 and up ₹15,000, including lower and upper limits.
Electronic application flow: As of October 1, the nodal office can accept or reject an account holder’s electronic appointment request. The application will automatically be accepted into the Central Record Keeping Agencies (CRA) system if no action is taken by the nodal office on the application within 30 days of award.
Buy an annuity with the same form: Now, at the time of maturity, no separate form is required for the annuity, and instead the release of the NPS will be considered as a proposal to purchase annuities from life insurance companies. IRDAI has taken this step to facilitate the process of integrating new members into this voluntary pension scheme.
Submit the life certificate digitally: To facilitate the submission process, IRDAI has required insurance companies to use Aadhaar-based authentication.
No credit card payment for level 2 account holders: The PFRDA has stopped the use of credit cards to pay for the subscription of the NPS contribution in Level 2 accounts.