PFRDA: Online option to exit from NPS

The Pension Fund Regulator recently announced that the subscribers can use online mode to exit from National Pension System.

What is the current process to quit from National Pension System?

Under the current process, the National Pension Subscribers have to physically approach their Points of Presence to complete the withdrawal request. They have to submit withdrawal forms along with other supporting documents for authorization by the Points of Presence.

What is the online process to exit from National Pension System?

In the online process, the subscribers of the National Pension system will initiate exit request in the Central Record Keeping Agency system. This is to be done using appropriate login credentials provided. The subscribers will then upload relevant withdrawal documents including Know Your Customer.

What is PFRDA?

PFRDA is Pension Fund Regulatory and Development Authority. The PFRDA was established in 2003. It was made a statutory body under Pension Fund Regulatory and Development Authority Act, 2013. It ensures orderly growth and development of pension market.

What is National Pension System?

National Pension System is a contribution pension system in India. Under the system, the entire pension withdrawal amount is tax free. The system is administered and regulated by the Pension Fund Regulatory and Development Authority.

What are the concerns with PFRDA?

• The PFRDA requires a clearer delineation. The lack of clarity in the regulatory framework of NPS is a major concern. This leads to potential conflict of interest.
• The NPS serves as a universal product securing citizens retiral incomes. However, there is an inadequate emphasis on financial consumer protection. For instance, the web-based grievance portal allows to register complaints only in English.
• The PFRDA fails to specify clear explanation in approaching the office of Ombudsman.

Month: Current Affairs - December, 2020