The Pension Fund Regulatory and Development Authority (PFRDA) on October 24, 2024, notified regarding the Compliance with Regulation 10 (3) of the PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015 for cancellation/surrender of annuity policies issued to NPS Subscribers by ASPs.
This circular, issued under Section 14 of the PFRDA Act 2013, replaces Circular No. PFRDA/2021/30/SUP-ASP/6 (July 22, 2021) on handling surrender requests of annuity policies for NPS subscribers and is effective immediately.
The National Pension System (NPS) aims to provide old-age income security through annuities managed by IRDAI-regulated Annuity Service Providers (ASPs). As per Regulation 10(3) of the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, NPS annuities cannot be surrendered or canceled after the free look period, except to facilitate issuance of a new annuity with the same or a different ASP, based on the subscriber's choice. In such cases, the cancellation proceeds must be transferred to the Trustee Bank account for processing the new annuity policy. Exceptions may apply due to legal requirements or specific causes, as defined by future PFRDA guidelines.
