The Pension Fund Regulatory And Development Authority (PFRDA) has in a recent circular informed about the addition of more services in the bouquet under the T+2 timelines.
The intermediaries of PFRDA, namely the central recordkeeping agencies (CRAs), pension funds, and custodians have significantly enhanced the system interface and IT capabilities to reduce the timelines of various transactions for providing better subscriber experience. The timeline for processing partial withdrawal requests has also been reduced to T+2 across all CRAs now.
For instance, those partial withdrawal requests authorised on Monday till specified timelines shall be processed such that the subscribers’ bank account is credited on Wednesday, considering those three days are settlement days. The reduced timelines will be introduced in a phased manner in the future for many more activities in the interest of the subscribers.
For associated CRAs like KFin Technologies, activities such as superannuation, premature exit, exit due to death, annuity withdrawal, and others, fall under the T+2 settlement category for requests authorised up to 11 am.
Similarly, for associated CRAs of subscribers such as CAMS, the list of activities include superannuation, premature exit, and exit due to death, annuity withdrawal, and others, under T+2 settlement for requests authorised up to 11 am.
For CRAs like Protean eGov Technologies, the list of activities include superannuation, premature exit, exit due to death, family/disability pension, annuity withdrawal, and tier II withdrawal, among others, for T+2 settlement for T+2 settlement for requests authorised up to 10:45 am.
In another circular, National Pension System (NPS) and Atal Pension Yojana (APY) subscribers are permitted to withdraw from their Permanent Retirement Account Number (PRAN) as per the applicable guidelines and the provisions of regulations issued by PFRDA.
The amount thus withdrawn is payable as a lump sum and utilised as ‘Purchase Price’ to buy annuity from the empanelled Annuity Service Provider (ASP) chosen by the subscriber at the time of exit.
Amount Withdrawn But Unclaimed: The circular also mentioned of instances where the corpus could not be credited to the subscribers’ savings bank account because of incorrect account details.
There have also been scenarios where the subscribers have cancelled the annuity under the ‘free-look period’ and the purchase price meant for annuity was returned to and remained idle in the NPS system till the time the subscribed selected a new ASP. These amounts are identified as ‘withdrawn but unclaimed’ which do not earn any investment returns to the benefit of subscribers.
Reclaim The Amount: Now, subscribers can reclaim the amount as per the format attached (annexure) that can be submitted to the nodal officers, points of presence (POP), APY service providers, CRAs, and NPS Trust as the case may be. The corpus is meant for the e-NPS subscribers that emanate due to unsuccessful transactions because of the wrong bank account number claimed from the NPS Trust.
My Withdrawal Module: The PFRDA, through its CRAs is also in the process of building a subscribers’ digital interface, named My Withdrawal Module (MWM), to ease the process of reclaiming such amount, which shall have the following enablement.
These are:
1] Provision to submit the beneficiary bank account details and verify the same through penny drop for name matching between PRAN and bank account.
2] Provision to upload the proof of bank account with the option to choose ASP for reissue of annuity as per the choice of subscriber.
Ensure Correctness Of Bank Account Number: The stakeholders need to ensure while processing withdrawal requests of the associated subscribers that the bank account and/or IFSC code is correct to ensure timely payment of the corpus.
In the case of Atal Pension Yojana, the service provider banks/department of posts need to ensure the corresponding bank account of the subscribers are in operative status until the closure proceeds of the APY are credited.
Reinvestment In PRAN: After building the MWM, the amount which lies beyond one month without transferring to the beneficiary’s bank account shall be reinvested in the same PRAN as per the choice of investment and/or pension fund prevailed at the time of exit, to benefit the subscribers with ‘market-linked returns’.
However, those PRANs frozen for any further transaction except for payment towards a lump sum or to buy an annuity will not have the facility. CRAs can build the MWM for the benefit of subscribers and popularise the facility to ease the process of reclaiming the amount.
