Annuity All Citizen

 

In the context of NPS, Annuity refers to the monthly sum received by the Subscriber/Claimant (Family Member - Spouse/Mother/Father of Subscriber, exit due to death) from the Annuity Service Provider (ASP). A percentage of the pension wealth as decided by the Subscribers/Claimants (minimum 40% or 80% is to be invested with ASP in case, Withdrawal is due to Superannuation & Pre-mature Exit/death exit respectively) is utilized for purchase of Annuity from the empaneled Annuity Service Providers

Following are the most common variants of annuity schemes that are available to NPS Subscribers:

1. Annuity for Life with Return of Purchase Price - Subscriber will get annuity for life time and on death of the Subscriber, payment of annuity ceases & 100% of the purchase price will be returned to the nominee(s).
2. Annuity payable for life - Subscriber will receive payment of annuity till he/she is alive and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
3. Joint Life Annuity without Return of Purchase Price - Subscriber will get annuity for life time and on death of the Subscriber, annuity will be payable to Spouse for life time. On death of the Spouse, payment of annuity ceases and no further amount will be payable.
4. Annuity for life increasing at simple rate of 3% p.a. – Subscriber will receive payment of annuity till he/she is alive increasing at simple rate of 3% p.a. and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
5. 5. Annuity for life with a provision for 50% of the annuity to the spouse of the annuitant for life on death of the annuitant/subscriber- Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive 50% of payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse. If the spouse predeceases the subscriber, payment of annuity will cease after the death of the annuitant. It may be noted that this annuity variant may be taken with or without return of purchase price.
6. 6. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant/subscriber- Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse. If the spouse predeceases the subscriber, the annuity ceases after death of the annuitant. It can be with or without return of purchase price. It may be noted that this annuity variant may be taken with or without return of purchase price.

 

Nominee and who can be a nominee

 

•       Subscriber is allowed to register up to three nominees in NPS. Subscriber needs to provide name, nominees’ relation with Subscriber and Percentage share. Value of Percentage share must be an integer. Sum of percentage share across all the nominees must be equal to 100. If sum of percentage is not equal to 100, entire nomination will be rejected.

•       In case of a male Subscriber, his legally wedded wife, his children, whether married or unmarried, his dependent parents and his deceased son’s widow and children.

•       In the case of a female Subscriber, her legally wedded husband, her children, whether married or unmarried, her dependent parents, her husband’s dependent parents and her deceased son’s widow and children.

•       In case of subscribers who does not identify themselves as male or female-their legally wedded spouse, their children, whether married or unmarried, their dependent parents and their deceased son’s widow and children.

•       If the deceased subscriber did not register nomination, then the accumulated pension wealth shall be paid to the family members on the basis of the legal heir certificate issued by the competent authorities of the State concerned or the succession certificate issued by a court of competent jurisdiction.

•       If Subscriber has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family. Any nomination made by such Subscriber in favour of a person not belonging to his family shall be invalid.

•       A fresh nomination is required to be made by the subscriber upon his/her marriage. The nomination made before marriage becomes invalid and the subscriber has to submit nomination again.

•       If a person does not have a family at the time of making a nomination, the nomination may be in favour of any person or persons but if the subscriber subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and you shall make a fresh nomination in favour of one or more persons belonging to your family.