Death Benefits Under National Pension Scheme

The National Pension Scheme is considered as a favorable retirement planning product by all segments of investors. Not only does the scheme help individuals amass an income-generating fund for their future, but it also provides a safety net in the form of death benefits. Death benefits are provided in the event of a subscriber’s demise.If a subscriber passes away before the maturity of the scheme, the nominee specified by the subscriber or a legal heir can encash the accumulated amount by submitting a withdrawal request,. The NPS investment gets matured once the subscriber reaches sixty years of age. However, withdrawal can  be delayed, and the subscriber can stay invested for another ten years.In case the nominee mentioned by the subscriber or registered under the CRA system then the nominee listed in the employee’s office records for the purpose of receiving other admissible terminal benefits shall be treated as nominee for the purposes of receiving benefits under NPS.

Different withdrawal forms are applicable to different categories of NPS subscribers. These forms can be downloaded from NSDL-CRA website.

The following documents need to be attached along with the duly filled withdrawal forms:

• KYC documents and original PRAN Card attested by POP-SP
• Covering letter from POP-SP
• Cancelled Cheque with the claimant’s name, bank account number and IFS Code; or Bank Certificate on the letterhead of the bank specifying the claimant’s name, bank account number and IFS Code in case of electronic payment. A copy of bank passbook is also accepted, as long as it contains the claimant’s photograph, name and IFS Code is self-attested by the claimant.
• A copy of the subscriber’s Death Certificate
• Relinquishment deed from all legal heirs, except the claimant on a stamp paper of Rs. 100.

The relevant withdrawal form, along with the supporting documents, must be submitted to the associated POP-SP. The POP-SP shall authorize the withdrawal form and other documents and forward the same to the CRA for storage purpose.Thus, the National Pension Scheme aims to provide financial stability and also implement social welfare measures for the benefit of the subscribers and their family.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.