In the context of NPS, Annuity refers to the monthly sum received by the Subscriber from the Annuity Service Provider (ASP). A percentage of the pension wealth as decided by the Subscribers (minimum 40% & 80% is to be invested with ASP in case Withdrawal is due to Superannuation & Pre-mature Exit and Death respectively) is utilized for purchase of Annuity from the empaneled Annuity Service Providers.
Indian Life Insurance companies which are licensed by Insurance Regulatory and Development Authority (IRDA) can act as Annuity Service Providers. However, Annuity Service Providers needs to be empanelled by PFRDA to provide Annuity services to the NPS Subscribers. The list of Annuity service providers empaneled by PFRDA can be accessed at: https://www.npscra.nsdl.co.in/Annuity-service-providers.php.
Annuity (Pension) starts immediately, if Subscriber fulfills the Age and Corpus criteria for purchasing Annuity (depending upon choice of ASP and Annuity scheme of the respective Annuity Service Provider).
Following schemes are available with ASPs:
Default Annuity Scheme shall provide for Annuity for life of the Subscriber and his or her spouse (if any) with provision for return of purchase price of the Annuity and upon the demise of such Subscriber, the Annuity be re-issued to the family members in the order specified hereunder at a premium rate prevalent at the time of purchase of such Annuity by utilizing the purchase price required to be returned under the Annuity contract (until all the family members in the order specified below are covered):
(a) Living dependent mother of the deceased Subscriber;
(b) Living dependent father of the deceased Subscriber.
After the coverage of all the family members specified above, the purchase price shall be returned to the surviving children of the Subscriber and in the absence of children, the legal heirs of the Subscriber, as may be applicable.
In case of Superannuation & Pre-mature Exit, Subscriber can purchase any one scheme which are available with respective Annuity Service Provider. However, In case of death, Spouse has to purchase Default Annuity Scheme.
Details of Annuity rates and other details may be checked on CRA website https://www.npscra.nsdl.co.in/Annuity-service-providers.php
Once an Annuity is purchased, the option of cancellation or reinvestment with another Annuity Service Provider or in other Annuity scheme shall not be allowed unless the same is within the time limit specified (free look period as provided in terms of the Annuity contract or specifically provided by the IRDA) by the Annuity Service Provider.
The mode and manner of payment of amount (if any) will depend on the type of Annuity scheme selected by the Subscriber while buying the Annuity. Family members of the deceased Subscriber need to contact concerned Annuity Service Provider.
At present five ASPs are providing the Annuity services to the NPS Subscribers. The ASPs are as follows:
The contact details of the ASPs are available at https://www.npscra.nsdl.co.in/Annuity-service-providers.php