Big news for investors. Retirement is a time when everyone hopes to enjoy life more fully. To make that happen, it’s important to have a solid savings plan and a steady income, so you’re not relying on anyone else for your everyday expenses. The National Pension System (NPS) can help you achieve both of these goals. Launched by the government in 2004, NPS is a voluntary retirement scheme that offers returns based on market performance.

With NPS, you can invest in two types of accounts: Tier-1, which is your main retirement account, and Tier-2, which is optional. Once you hit 60, you can withdraw 60% of your total investment as a lump sum, while the remaining 40% is used to provide you with an annuity.

But what if the account holder passes away? What happens to the funds? If the NPS account holder dies, the entire corpus goes to the nominee. If the nominee wants to receive a pension, they can choose to purchase an annuity. They’ll need to select an annuity service provider and the specific annuity plan on the withdrawal form.

If there’s no nominee

When an account holder hasn’t designated a nominee, the funds in the account will go to their legal heir or family member. To access these funds, the family needs to present a Succession Certificate. This certificate must be submitted to the state revenue department for verification, and once that’s done, the deposited amount will be released to the family.

Required documents

To claim the NPS amount, the nominee or heir needs to fill out some forms, like the death withdrawal form, which can be easily downloaded from www.npscra.nsdl.co.in. The form includes a checklist of all the necessary documents that need to be attached, such as the death certificate, legal heir certificate or succession certificate, KYC documents, and proof of bank account for both the nominee and the legal heir.

The nominee or heir must submit all these documents to the Point of Presence (POP). After that, a verification process takes place. Once verified, the withdrawal request is sent to Protean CRA, and then the total amount is transferred to the claimant’s account. If the nominee or heir has chosen an annuity, the details will be provided to their selected annuity service provider.