Processing Death Claims where Nomination is changed post death of Subscribers under NPS

Processing Death Claims where Nomination is changed post death of Subscribers under NPS– Exits and Withdrawals under the NPS Regulations 2015

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

CIRCULAR

PFRDA/2022/29/ASP-EXIT/02

20th Oct 2022 

To,
All NPS Stake Holders

Subject: Processing Death Claims where Nomination is changed post death of Subscribers

Nomination can be made only by the subscriber. However, there are special provisions enabled as per exit regulations for treating the nomination as made in the service records to protect the interest of the subscribers who were employed and covered under NPS through their employers.

The following points are clarified for the benefit of various intermediaries which are associated with exit processing viz Nodal officers of Govt/ Non Govt Sector, POPs and NPST in order to facilitate seamless claim processing.

1. Any changes in the nomination post death of the Subscriber using the deceased Subscribers’ login credentials shall be treated as invalid.
2. All those cases with those invalid nominations, the valid nomination made by the Subscriber (valid nomination are those which fulfil nomination rules defined by PFRDA as provided in its exit Regulations & the same provided at Annexure) before death shall be considered for claim processing.
3. Those cases with invalid nomination and as defined in Exit Regulations 3(c) & 4(c)in Government and Non-Government Sector respectively, the claims need to be processed by the respective intermediary and the eligible corpus has to be paid to the legal heirs.
4. Subscribers covered under Govt Sector (sub-clause(c) of Regulation 3) and Corporate sub-clause(c) of Regulation 4, where no valid nomination exists in accordance with exit  regulations: At the time of exit of such subscriber on account of death, the nomination, if any existing in the records of such subscriber with his or her employer for the purpose of receiving other admissible terminal benefits shall be treated as nomination exercised for the purposes of receiving benefits under the NPS as per the provisions of Exit Regulations 32(xii).
5. The intermediaries associated with processing of claims are to be provided with the required functionality/ system interface in their user login by CRAs to capture the claimant details viz legal heirs or nominee as per employer records as the case may be, if those invalid nominations are observed. In the system interface, the employer has to specify and declare and certify that the nomination exists in the service record of the employee are being considered for claim settlement.
6. In case of Subscribers under UOS: Any changes in the nomination post death of the Subscriber using the deceased Subscribers’, login credentials shall be treated as invalid and the amount needs to be settled in favour of legal heirs.

Chief General Manager

Annexure

CHAPTER VII of PFRDA(Exits and Withdrawals under the NPS) Regulations, 2015:

Regulation 32. Nomination. – Notwithstanding anything contained in these regulations or in any other law for the time being in force, a subscriber, at the time of joining the National Pension System is required to make a nomination, in the specified form, conferring on one or more persons the right to receive the amount that may stand to the subscriber’s credit in the accumulated wealth or fund in the event of the subscriber’s death or the subscriber missing and presumed dead as per the provisions of the Indian Evidence Act 1872 and amendments thereto, before that amount becomes payable or having become payable has not been paid. The nominee or nominees, as the case may be, shall be entitled, on the death of the subscriber or the subscriber missing and presumed dead to receive, to the exclusion of all other persons, all such moneys which have so remained unpaid:

Provided that, –

1. if the nominee predeceases the subscriber, the nomination shall so far as it relates to the right conferred upon the said nominee, become void and of no effect;
2. where a provision has been duly made in the nomination, in accordance with these regulations, conferring upon some other person the right to receive all such moneys, which have so remained unpaid, in the event of the nominee predeceasing the subscriber, such right shall, upon the nominee being deceased, pass to such other persons standing as nominees;
3. a subscriber may in his nomination distribute the amount that may stand to his credit in the fund amongst his nominees at his own discretion;
4. if a subscriber has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his Any nomination made by such subscriber in favour of a person not belonging to his family shall be invalid;
5. a fresh nomination shall be made by the subscriber on his marriage and any nomination made before such marriage shall be deemed to be invalid;
6. if at the time of making a nomination the subscriber has no family, the nomination may be in favour of any person or persons but if the subscriber subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and the subscriber shall make a fresh nomination in favour of one or more persons belonging to his family;
7. where the nomination is wholly or partly in favour of a minor, the subscriber may, for the purposes of this Scheme, appoint a major person of his family, to be the guardian of the minor nominee in the event of the subscriber predeceasing the nominee and the guardian so appointed;
8. where there is no major person in the family, the subscriber may, at his discretion, appoint any other person to be a guardian of the minor nominee;
9. a nomination made under the National Pension System may at any time be modified by a subscriber after giving a written notice of his intention of doing so in the mode as may be A nomination or its modification so made shall take effect to the extent that it is valid on the date on which it is received by the intermediary or nodal office under the National Pension System;
10. if a subscriber proves that his spouse has ceased, under the personal law governing him or her, or the customary law of the community to which the spouses belong, to be entitled to maintenance he or she shall no longer be deemed to be a part of the subscriber’s family for the purpose of this Scheme, unless the subscriber subsequently intimates by express notice in writing to the designated intermediary for the purpose that he or she shall continue to be so regarded; and
11. if a subscriber by notice in writing to the designated intermediary for the purpose expresses her desire to exclude her husband from the family, the husband and his dependent parents shall no longer be deemed to be a part of the subscriber’s family for the purpose of this Scheme, unless the subscriber subsequently cancels in writing any such notice.
12. In respect of subscribers covered under sub-clause(c) of Regulation 3 and subclause(c) of Regulation 4, where no valid nomination exists in accordance with these regulations, at the time of exit of such subscriber on account of death, the nomination, if any existing in the records of such subscriber with his or her employer for the purpose of receiving other admissible terminal benefits shall be treated as nomination exercised for the purposes of receiving benefits under the National Pension The employer shall send a confirmation of such nomination in its records, to the National Pension System Trust or the central recordkeeping agency, while forwarding the claim for processing.]

Explanation I – For the purposes of nomination wherever provided in this regulation,-

(a) the expression “family”,

1. in relation to a male subscriber, shall mean his legally wedded wife, his children, whether married or unmarried, his dependent parents and his deceased son’s widow and children;
2. in relation to a female subscriber, shall mean her legally wedded husband, her children, whether married or unmarried, her dependent parents, her husband’s dependent parents and her deceased son’s widow and children;
3. in relation to any subscriber who does not identify themselves as male or female, shall mean their legally wedded spouse, their children, whether married or unmarried, their dependent parents and their deceased son’s widow and children;]

Explanation II –In any of above three, if the child of a subscriber or as the case may be, the child of a deceased son of the subscriber has been adopted by another person and if, under the personal law of the adopter, adoption is legally recognized, such a child shall be considered as excluded from the family of the subscriber.

Important Note for Stake Holders: Please refer PFRDA Regulations: http://www.pfrda.org.in/index1.cshtml?lsid=72 for complete information.