Exit process is now made easier for e-NPS subscribers

ew avenue of NPS exit opens up for e-NPS subscribers with the latest PFRDA circular.

The Pension Fund Regulatory and Development Authority (PFRDA) has opened up a new exit route for subscribers of the National Pension Scheme (NPS). e-NPS subscribers and subscribers contributing through Points of Presence (POP) will be given an online platform wherein they can exit through self-authorisation. 

For subscribers with more than Rs 10 lakh corpus and subscribers associated with POPs, the online platform can be used for the exit. Subscribers with more than Rs 10 lakh will have their exits verified by their respective banks who will act as the PFRDA-registered POPs. For e-subscribers directly associated with POPs, the POPs will verify the exit requests. 

The process of exit varies for subscribers with a corpus of up to Rs 10 lakh. The circular stated that such subscribers can exit via the online or offline process. They can visit the website of National Securities Depository Limited (NSDL) or fill up a physical withdrawal form and submit it to the nodal office or their bank, who would be their POP. 

These bodies will then process the exit request for the interested subscriber, who will have to furnish their offline Aadhaar details and comply with the required PFRDA regulations. The circular states that this step aims to make the NPS exit process more agile. Notably, subscribers can also open their NPS account using the offline Aadhaar process. 

How can one subscribe to the NPS?

An NPS account can be opened and operated both online and offline. You can manage your account using the official NPS app. To open an e-NPS account through your bank, you need to have an account in one of the 17 banks registered with NSDL. You will need your PAN, bank KYC, or Aadhaar to open this account. A Permanent Retirement Account Number (PRAN) has to be e-signed or posted by the subscriber to the e-NPS processing centre. In the offline process, the application is made through a POP.

What has been the exit policy till now?

You can opt for one of two types of NPS: Tier I and Tier II. Tier I has a lock-in period while Tier II features unlimited withdrawals. After 10 years of contribution to a Tier I account, not more than 25% can be withdrawn. In case of a Tier II account, a withdrawal application must be made to the POP who will process the request. The amount is transferred to the registered bank account within three days of the date of processing.

What is a POP?

POP or POP-SP (Point of Presence Service Provider) is an entity that provides NPS services to subscribers through a network of branches. There are presently 81 POPs, including banks, with branches all across India.

What is the new exit process for subscribers with up to Rs 10 lakh in the corpus?

The self-authorisation required for exit can be done using offline Aadhaar in the following manner:

You have to log in to the Central Recordkeeping Agency (CRA) using your PRAN and I-PIN. In the exit menu, you will have to provide the corpus allocation details, annuity service provider details, annuity scheme etc. You will have to upload KYC documents, withdrawal documents, identity proof etc. and e-sign to authenticate your request. 

If you have a corpus of less than Rs 10 lakh, the self-authorisation option will appear. You will have to download the offline Aadhaar XML file from UIDAI and upload it into the CRA system along with the Aadhaar share code and contact details. The CRA system will accept the self-authorisation request after verifying the documents attached. 

Thereafter, the annuity service provider (the insurance company that you selected) will be provided with your details by the CRA system, using which the former will upload the annuity details to the CRA system. This concludes your exit self-authorisation process.