There is a major change in the National Pension System or NPS exit rule applicable from the year 2023. Enforced by The Pension Fund Regulatory Development Authority (PFRDA), it states that an NPS subscriber can now purchase multiple annuities while exiting if their fund is over ₹10 lakh and they will buy each annuity of ₹5 Lakh.
NPS Exit Rule Changed for the Purchase of Multiple Annuities
“The option of multiple Annuities shall be provided for those Subscribers who earmark the annuity corpus more than Rs 10 lakhs wherein Rs 5 lakhs utilised to buy each annuity scheme,” reads the circular released May 10.
“Under NPS, subscribers are allowed to buy immediate annuities from Annuity Service Providers (ASPs) under the enabling provisions of Exit Regulations of PFRDA. Till now, the subscribers were allowed to buy only one annuity scheme from the ASP at the time of exit,” mentioned financial express.
“In the interest of subscribers’ retirement income optimization and to provide them with a wider range of annuity options, PFRDA is pleased to inform you that the choice of multiple annuities from the same ASP will be made available,” said the regulator.
The New changes
“As per the regulator, the option of multiple Annuities will be provided for those subscribers who earmark an annuity corpus of more than Rs 10 lakhs wherein Rs 5 lakhs is utilized to buy each annuity scheme.”
“The regulator has advised CRAs to build the necessary system-level functionality to facilitate the implementation of this change.”
“Until this feature is developed, ASPs can handle the requests for multiple annuities received from subscribers and provide the necessary information to CRA through Reverse Information Flow (RIF),” the regulator said.
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“PFRDA believes that this change will greatly benefit subscribers by providing them with a wider range of annuity options and optimizing their retirement income,” further said.
