NPS Death Claims: The National Pension System (NPS) serves as a mechanism for retirement savings. This initiative is available to Indian citizens as a long-term financial strategy, ensuring adequate financial resources post-retirement. NPS is a thoughtfully-structured voluntary retirement savings plan that enables individuals to accumulate sufficient funds for their retirement throughout their professional careers.
During their employment, individuals participating in the NPS can allocate a portion of their earnings to their NPS account. Upon retirement, the account holders, along with their legal heirs, will receive an annuity derived from the accumulated corpus over the years. However, complications may arise if the NPS account holder passes away without a valid nomination or with an invalid nomination.
What happens in case of no nomination
In circumstances where the deceased subscriber’s nomination was not registered prior to their passing, the total pension wealth accumulated will be distributed to their family. This distribution is governed by legal provisions, which may include either an heir certificate or a succession certificate.
Also Read NPS Calculator: How to secure Rs 2 lakh monthly pension post retirement? BHIM enables NPS contributions through Bharat Connect for hassle-free retirement saving Indian Family Businesses: Few clear on succession, why others need to worry? Govt employees under NPS must submit THIS form for pension benefits – Know deadline and details
The heir certificate is issued by the State’s Revenue Department, while the succession certificate is formally granted by a court with the appropriate jurisdiction. According to NPS regulations, if there are no valid nominations at the time of the subscriber’s death, and if the employer possesses any records of the subscriber’s nominee for terminal benefits, such records will not be considered as valid nominations.
Also Read: NPS Calculator: How to secure Rs 2 lakh monthly pension post retirement?
Withdrawal of NPS funds upon the demise of the subscriber
In the event of a subscriber’s death, the entire pension wealth (100 percent of the NPS corpus) will be allocated to the designated nominees or legal heirs, in accordance with the guidelines set forth by the Pension Fund Regulatory and Development Authority. Should the legal heir or nominee opt to receive a pension or annuity, they will be required to select an appropriate pension or annuity scheme, as well as an Annuity Service Provider (ASP) during the death withdrawal process.
» Read More
