National Pension Scheme: PFRDA changes rules for death claims benefit-- Now nominees have to do THIS

According to the Pension Fund Regulatory and Development Authority (PFRDA), in the event that National Pension System (NPS) subscribers pass away, intermediaries may submit withdrawal claims using a video-based customer identification process (VCIP).

In the event of a subscriber's death, the complete accrued pension wealth of the subscriber (100 percent NPS Corpus) shall be given to the nominees or legal heirs as applicable, according to the PFRDA (Exits & Withdrawals under NPS) Regulations 2015 and revisions.

By submitting a properly completed death withdrawal form and supporting papers, such as the subscriber's death certificate, KYC records, and bank account information, a legal heir or nominee may file an NPS claim.

The PFRDA indicated that video verification has been included as an additional layer to verify the nominee, claimant, and legal heir while clearing the withdrawal claims in the event of the untimely death of pension investors in a circular released on January 4, 2023. Through Aadhaar e-KYC, the credentials of the candidate can be found.

The regulator claimed that intermediaries have been requesting that VCIP be used so that withdrawal claims can be processed more quickly.

Earlier in 2020, the nodal pension agency gave intermediaries permission to use the Video Based Customer Identification Process (VCIP) for all NPS-related services, including onboarding and exit, in a circular dated October 6, 2020.

According to the PFRDA, the nodal agency would preserve a video record of the transaction of the person who submits the paperwork for processing the claim while the nominee/claimant/legal heir is being verified. Aadhaar e-KYC or DigiLocker will then be used to verify the nominee's information.