When a subscriber reaches 60 years old, NPS matures. He gets a lump sum payment equal to 60% of the entire amount. Annuities must be purchased with the remaining forty per cent of the funds. This annuity provides him with a monthly pension.
40 per cent of the entire money must be used to purchase an annuity plan at the National Pension System’s (NPS) maturity. The subscriber receives a lump sum payment of the remaining 60% of the total amount, tax-free.
The subscriber may purchase an annuity with additional monies if he so chooses. The participant in this annuity plan receives a pension each month. What are the guidelines for purchasing an annuity, where can one get one, and what kinds of annuities are there? Let’s make an effort to find the answers to these queries.
When a subscriber reaches the age of 60, NPS matures. The next step is for someone to purchase an annuity from annuity service providers. There are fifteen annuity service providers on the Pension Fund Regulatory and Development Authority (PFRDA) list. Annuities come with five primary possibilities in total.
1. Annuity for Life with ROP (Return on Purchase Price)
The subscriber will get a pension under this plan for the duration of his life. Upon his passing, the pension will cease. The nominee will get a refund of the full money spent to buy the annuity.
2. Joint Life Annuity with ROP
This pension will be paid out for as long as the subscriber is living. His spouse’s pension will be continued after his passing. After the spouse passes away, the pension will end. The nominee will get a full refund of the money spent to buy the annuity.
3. Family Income with ROP
The subscriber to this plan will get a pension for the rest of his life. His spouse will receive the pension upon his death. The subscriber’s dependent father will get the pension first, followed by the dependent mother, following the death of the spouse. Following the passing of the final pension recipient, the pension will cease. The subscriber’s children or legal heirs will thereafter get the whole amount spent to acquire the annuity.
4. Annuity For Life Without ROP
The subscriber will get a pension under this plan for the duration of his life. After his passing, the pension will cease. The candidate will not receive any money back.
5. Joint Life Annuity Without ROP
The subscriber will receive a pension for the rest of his life under this. His wife or spouse will receive a pension for the rest of his life after his passing. After the spouse passes away, the pension will end. The candidate will not receive any money back.
Also Read: Important Update for NPS Subscribers! Check Out The Latest Mandate from Pension Fund Regulator
