Q1. What are the guidelines for withdrawal due death of Government Subscriber?

In case of Death of NPS Subscriber (before attaining the age of superannuation), at least 80% of the accumulated pension wealth of the Subscriber needs to be utilized for purchase of an Annuity providing for monthly pension to the Family Members i.e. to Spouse of Subscriber, if any and then to dependent mother & then to dependent father of Subscriber. The balance pension wealth is paid as lump sum to the nominees or legal heirs, as the case may be, of such Subscriber. Further, In case, the total corpus in the NPS account is less than or equal to Rs. 5 lakh as on the Date of Death of the Subscriber, the nominees or legal heirs as the case may be, shall have the option of complete (100%) Withdrawal. If none of the family members of deceased Subscriber (Spouse, if any, Mother and Father) are alive, then NPS Corpus meant for issue of annuity shall be returned to the surviving children of the Subscriber and in absence of children, the legal heirs of the subscriber as applicable. Further, if family pension is being paid/payable to family members from Government, then as per the Regulations, entire pension wealth (100% corpus) shall be transferred to the Nodal Office for further settlement as per Government directives.

FAQs on NPS Exit/Withdrawal Process – upon death of Subscriber

In case of Death of NPS Subscriber (before attaining the age of superannuation), at least 80% of the accumulated pension wealth of the Subscriber needs to be utilized for purchase of an Annuity providing for monthly pension to the Family Members i.e. to Spouse of Subscriber, if any and then to dependent mother & then to dependent father of Subscriber. The balance pension wealth is paid as lump sum to the nominees or legal heirs, as the case may be, of such Subscriber. Further,

In case, the total corpus in the NPS account is less than or equal to Rs. 5 lakh as on the Date of Death of the Subscriber, the nominees or legal heirs as the case may be, shall have the option of complete (100%) Withdrawal.
If none of the family members of deceased Subscriber (Spouse, if any, Mother and Father) are alive, then NPS Corpus meant for issue of annuity shall be returned to the surviving children of the Subscriber and in absence of children, the legal heirs of the subscriber as applicable.

Further, if family pension is being paid/payable to family members from Government, then as per the Regulations, entire pension wealth (100% corpus) shall be transferred to the Nodal Office for further settlement as per Government directives.

From at least 80% NPS corpus, the annuity (Pension) shall be paid to the Spouse of the Subscriber (if any) for the lifetime. In case, spouse is not there/not alive, annuity shall be paid to living dependent mother and then to living dependent father of the deceased Subscriber. After the coverage of all such family members, the purchase price of the annuity shall be returned to the surviving children of the Subscriber and in absence of children, the legal heirs of the subscriber as applicable.

At least 80% NPS corpus needs to be mandatorily utilized for annuity if corpus is more than Rs. 5 lakh. The nominee/Claimant is required to select Annuity Service Provider (ASP) and annuity Scheme in Death Withdrawal Form.

The Nominee/Claimant is required to submit duly filled-up Death Withdrawal Form alongwith supporting documents such as [Death Certificate, KYC Documents (ID Proof & Address Proof), Bank Account Proof and other required documents]. The list of documents required is given in Death Withdrawal Form. The Death Withdrawal Form is available under “Forms” section, which is available under respective sector on this website.

Withdrawal Form needs to be submitted by each of the Nominee/Claimant.

The Nominee/Claimant is required to submit the Death Withdrawal Form alongwith relevant supporting documents to the associated Nodal Office of the Subscriber i.e. to the Drawing & Disbursing Office (DDO) / Pay & Accounts Office (PAO) / District Treasury Office (DTO).

The Nodal Office will process death withdrawal request online in the CRA system. On processing of withdrawal request by Nodal Office, the funds will be transferred to Nominee/Claimant within stipulated timelines. Also, if annuity is applicable, then Claimant’s details are shared with Annuity Service Provider (ASP) for completion of annuity formalities.

On receipt of physical documents from all the Nominees/Claimants, the associated Nodal Office will verify the documents. On successful verification of documents, the Nodal Office will process death withdrawal request online in the CRA system (www.cra-nsdl.com) with Maker-Checker.

The Maker User of Nodal Office will initiate death withdrawal request and Checker User of Nodal Office will authorize the request in the CRA system. Scanned copies of Withdrawal Forms & supporting documents also need to be uploaded in CRA system by the Nodal Office. The Standard Operating Procedure (SOP) on processing of death withdrawal request is available under “Nodal Office Corner” section, which is available under respective sector on this website.

On successful processing of withdrawal request by Nodal Office, the funds will be transferred to Nominee/Claimant within stipulated timelines. Also, if annuity is applicable, then Claimant’s details are shared with Annuity Service Provider (ASP) for completion of annuity formalities.

The Withdrawal proceeds are credited in Nominee/Claimant Bank Account (as per the bank details provided at the time of initiating online Withdrawal request) through electronic mode only.

Default Annuity Scheme i.e. NPS Family Income Scheme is mandatory in case of exit due to death. This scheme shall provide for Annuity (pension) for life to the Spouse of the Subscriber (if any) for the lifetime. In case, spouse is not there/not alive, annuity shall be paid to,

Living dependent mother of the deceased Subscriber;
Living dependent father of the deceased Subscriber.

After the coverage of all the family members specified above, the price of the annuity shall be returned to the surviving children of the Subscriber and in absence of children, the legal heirs of the subscriber as applicable.

The amount of annuity (pension) depends on the NPS Corpus of the Subscriber and on the other factors such as the Annuity Service Provider (ASP) selected, age of Claimant etc. The list of ASPs, Annuity rates and other details can be checked at: https://www.npscra.nsdl.co.in/Annuity-service-providers.php on this website

In case of death of NPS Subscriber, it is mandatory for the family members (Spouse/Mother/Father of deceased Subscriber) to select Default Annuity Scheme i.e. NPS Family Income Scheme, if NPS Corpus of the Subscriber is more than Rs. 5 lakh as on Date of Death of the Subscriber.

Such Withdrawal request will be processed as per below mentioned scenario:

Withdrawal form needs to be submitted by all the Nominees registered in CRA system.
If some Nominee/s doesn’t not want to claim the NPS corpus:
-Relinquishment deed is to be submitted by the Nominee/s who doesn’t want to claim the NPS benefits.
-Indemnity Bond is to be submitted by the Nominee who is claiming the NPS benefits.
-Format of Relinquishment deed and Indemnity Bond is available under “Forms” section, which is available under respective sector on this website.
In case one Nominee is a major and other is a minor,
– Major Nominee will submit his/her Withdrawal form
– Guardian (on behalf of minor) will submit the Withdrawal form along with the birth proof of the minor.

If none of the family members (Spouse, Mother and Father of deceased Subscriber) are alive, then NPS Corpus meant for issue of annuity shall be returned to the surviving children of the Subscriber and in absence of children, the legal heirs of the subscriber as applicable.

The children of Subscriber / legal heirs are required to submit duly filled-up Death Withdrawal Form along with supporting documents to the associated Nodal Office of the Subscriber. The list of documents required is given in Death Withdrawal Form which is available under “Forms” section, under respective sector on this website.

In case, the nomination is not registered by the deceased subscriber before his/her death, the accumulated pension wealth shall be paid to the family members on the basis of the legal heir certificate issued by the Revenue authorities of the State concerned or the succession certificate issued by a court of competent jurisdiction.

As per Pension Fund Regulatory and Development Authority (PFRDA) (Exits and Withdrawals Under the National Pension System) Regulations 2015 and amendments thereto, where no valid nomination exists in accordance with these regulations, at the time of exit of such Subscriber on account of death, the nomination, if any existing in the records of such Subscriber with his or her employer for the purpose of receiving other admissible terminal benefits shall be treated as nomination exercised for the purposes of receiving benefits under the NPS.

In the context of NPS, Annuity refers to the monthly sum received by the Claimant (Family Member – Spouse/Mother/Father of Subscriber) from the Annuity Service Provider (ASP). A percentage of the pension wealth as decided by the Claimant (minimum 80% is to be invested with ASP in case exit due to death) 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 need to be empaneled by PFRDA to provide Annuity services to the NPS Subscribers. The list of Annuity Service Providers empaneled by PFRDA to provide annuity under NPS can be accessed at: https://www.npscra.nsdl.co.in/Annuity-service-providers.php on this website.

The amount of annuity depends on the NPS Corpus of the Subscriber and on the other factors such as the Annuity Service Provider (ASP) selected, age of Claimant etc. The Annuity rates and other details can be checked at:https://www.npscra.nsdl.co.in/Annuity-service-providers.php on this website.

The annuity (pension) will be issued by the Annuity Service Provider (ASP).

On execution of withdrawal request in CRA, the annuitant’s details (Claimant details) and scanned documents will be shared with ASP as opted by Claimant. If the annuitant’s details and scanned documents are correct, annuity policy will be issued by ASP.

If documents uploaded are not sufficient/incorrect or any additional documents required, then ASP may contact Claimant for completion of annuity formalities. Alternatively, if required, Claimant may contact ASP. The complete contact details of ASPs are available on this Website under Annuity Service Provider Section at: https://www.npscra.nsdl.co.in/Annuity-service-providers.php

On completion of annuity formalities, ASP will confirm Annuity request online in the CRA system and Funds (Annuity Corpus) will be transferred to ASP for issuance of annuity to Claimant within stipulated timelines. ASP will issue annuity policy to family members within T+2 working days of receiving the funds at their end.