EMPANELMENT OF ANNUITY SERVICE PROVIDERS (ASPs) For NATIONAL PENSION SYSTEM (NPS) PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY First Floor, ICADR Building, Phase II, Plot No 6, Vasant Kunj Institutional Area, New Delhi-110070 Tel:011-26897948/ 49 Fax- 26897938 Website: www.pfrda.org.in
PFRDA invites applications from the IRDA registered Life Insurers for empanelment as Annuity Service Providers (ASP) for providing / facilitating purchase of annuities to the subscribers of National Pension System (NPS) at the time of their exit from National Pension System. As per the NPS, a subscriber can exit from the system under the following scenarios: 1. On attaining the Normal Retirement Age (NRA)/ 60 years: Subscriber is required to compulsorily annuitize at least 40% of the pension wealth and the remaining 60% can be withdrawn as a lump sum or in a phased manner. 2. Upon death due to any cause: Nominee to receive 100% of pension wealth in lump sum. However, if the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure. 3. Withdrawal any time before 60 years of age: Subscriber is required to invest at least 80% of the pension wealth to purchase a life annuity from any IRDA regulated life insurance company. Rest of the pension wealth may be withdrawn as lump sum. ELIGIBILITY CRITERIA The following entities are eligible to apply. 1. IRDA licensed Life Insurance Companies dealing and selling annuity products in the Indian market for at least last 3 years. 2. Having a minimum Net worth of 250 Crores. 3. There should not have been any change in shareholding of more than 20%, in the last 3 years. 4. The Life insurer should have competency in design, development and offering of Annuity products. This will be demonstrated by the details of the annuity products filed with IRDA. 5. Not being barred from dealing with or selling annuity products in the market by IRDA. However, Chairman, PFRDA reserves the right to waive or modify the above mentioned eligibility criteria without assigning any reason or giving any due notice. Scope of Work for ASP: The ASPs will be required to provide various kinds of Annuity options to the subscribers which can be purchased directly by them at the time of superannuation/annuitisation through National Pension System. The types of annuities that are proposed to be provided are as per Annexure II. It may be noted that the annuities will be bought by the NPS subscribers from the list of Annuity Service Providers (ASP s) approved by PFRDA and from amongst the annuity options made available. The Annuity Service Provider (ASP) enlisted should ensure that the final product or options accepted are in conformity with IRDA guidelines on file and use, all the relevant rules, regulations and acts of IRDA applicable for such a product. NPS system consisting of Central Record Keeping agency (NSDL at present) and Trustee Bank (Bank of India) would be facilitating data transfer and corpus from the NPS to the annuity service provider (electronically) directly as per the option exercised by the NPS subscriber. 2
Interested and eligible Life Insurers may submit their applications as per the enclosed format (Annexure I) along with the documentary proof(s) with respect to the details furnished in the application form. PFRDA reserves the right to accept or reject any application without assigning any reason. Application form for empanelment shall be submitted to PFRDA, super scribing the envelope as Application for empanelment of Annuity Service Provider for National Pension System. The Bottom Left corner of the outer cover should carry the full name, address, telephone nos., e-mail ID etc. of the Company submitting the application. The sealed envelope containing the application should be addressed to: Pension Fund Regulatory and Development Authority, 1 st Floor, ICADR Building, Plot No 6, Vasant Kunj Institutional Area, Phase-II, New Delhi 110 070 Based on their application and eligibility, the Annuity Service Providers will be empanelled by PFRDA. However, Chairman, PFRDA reserves the right to accept/cancel the empanelment of Annuity Service Provider without assigning any reason or giving any due notice. 3
ANNEXURE I APPLICATION FOR EMPANELMENT OF ANNUITY SERVICE PROVIDERS (ASPs) For NATIONAL PENSION SYSTEM (NPS) INFORMATION TO BE FURNISHED BY THE APPLICANT S. Particulars No. 1. Name of the Life Insurer Details 2. Principal place of business with full address (attach separate sheets, if necessary) 3 Name of the Primary Contact Person 4 Telephone & Mobile No. 5 Fax No. 6 E-mail ID 7 Brief profile of executives & Managerial team with experience in the Annuity product field (attach separate sheet, if necessary) 8 Details of experience in dealing with Govt Departments /organisations / Statutory /Autonomous bodies Banks / financial institutions / PSUs etc for the purpose of providing Immediate Annuity products (attach separate sheet, if necessary) 9 Details of Immediate Annuity Business underwritten for the last 5 years on financial year basis 10 As the business emanating from NPS would be direct, please confirm that no agency commission would be charged for the same to the subscribers. 11 Annuity Options that would be provided by Annuity Service Provider Please refer to Annexure II List of Documents to be attached along with this application 1. A certificate duly signed by a Chartered Accountant who is not an employee of the Company and clearly stating the Net Worth (Paid up capital + Reserves + surplus) of the Company for the last 5 financial years 2 A certificate from the CEO of the Company clearly stating the date from which the 4
Company has started selling Annuity products along with a statement providing for the Name, unique identification number of the annuity products the company has and the date of approval of the respective products. 3 A certificate duly signed by a Chartered Accountant who is not an employee of the Company stating that there is no change in shareholding of the Company of more than 20%, in the last 3 financial years 4 A certificate from the CEO of the Company that the company is/was not barred from dealing with or selling annuity products in the market by IRDA. 5 A certificate duly signed by CEO/CFO/CIO of the Company clearly showing the annuity provider s fund size (AUM) in Crores for the company, for the last 5 Financial Years 6 Company s registration certificate issued by IRDA 7 A certificate duly signed by CEO/CFO/CIO of the Company clearly showing the annuity provider s fund size (AUM) in Crores for the company, for the last 5 Financial Years 8 A certificate duly signed by CEO/CFO/CIO of the Company clearly showing the annuity provider s fund size (AUM) in Crores accruing from Annuity Business only, for the last 5 Financial Years 9 A certificate duly signed by the Appointed Actuary of the Company on the Solvency margin ratios clearly showing the Solvency margin reported to IRDA for the past 5 financial years 10 A certificate duly signed by an Independent Chartered Accountant clearly showing the annuity provider s Profit before Tax (PBT) for the last 5 financial Years 11 A certificate duly signed by CEO/CFO of the Company clearly showing the Management Expense Ratio for the past 5 financial years 12 A certificate duly signed by CEO/CFO of the Company clearly showing the full details on any regulatory strictures or penalties imposed by IRDA/SEBI/RBI or any other government body during the last 5 financial years and till 31st Oct, 2011. If no penalties/regulatory strictures were imposed 5
13 by any of the above authorities a certificate clearly specifying the same needs to be submitted. A certificate duly signed by CEO of the Company on the Grievance settlement Ratio (No. of grievances settled / Total grievances reported Plus outstanding at the beginning of the financial year) and clearly providing the information for the last 5 financial years 14 A certificate duly signed by CEO/CFO/CIO of the Company clearly stating the date from which the Company is selling Group Annuity products in India. 15 A certificate duly signed by CEO/CFO/CIO of the Company clearly stating the individual annuity products filed with IRDA along with their UIN, date of approval and date of withdrawn(if withdrawn from the market) Signature of the Authorized Person with official seal Name Designation Contact details Date: Place: Important Notes: Please also send soft copy of the application only (without attachments) at Venkateswarlu.peri@pfrda.org.in Please attach list of documents as per requirement above. 6
Option OPTION I OPTION II OPTION III OPTION IV OPTION V OPTION VI OPTION VII OPTION VIII OPTION IX OPTION X ANNEXURE II Annuity Type to be provided by Annuity Service Provider Pension (Annuity) payable for life at a uniform rate. Pension (Annuity) for life with return of purchase price on death of the annuitant to the nominees/legal heirs. The monthly pension (annuity) should be paid to the subscriber for life and upon death of subscriber the monthly annuity shall be paid to the family members in order and for period as detailed in Annexure III. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant with return of purchase price on upon death of annuitant to the nominees/legal heirs. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant with return of purchase price on upon death of annuitant to the nominees/legal heirs. Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant lives. Any other annuity types that PFRDA or Government of India may ask the Annuity Service Provider to design for NPS subscribers at a later date. Any other annuity types designed or proposed by the Life insurer for this purpose. Will be provided/ will not be provided. If the option cannot be provided, please state the reasons thereof. You may use an additional sheet, if required for the purpose. Signature of the Authorized Person with official seal Name Designation Contact details Date: Place: 7
ANNEXURE - III Pensionary benefits to Government employees under the National Pension System (1) Pension for the life time of the Government employee exiting from NPS (1) The period for which family pension is payable shall be as follows - (i) subject to clause (1) above, in the case of a widow or widower up to the date of death or remarriage, whichever is earlier. (ii) subject to (1) and 2 (i) above, in the case of an unmarried son, until he attains the age of twentyfive years or until he gets married, whichever is earlier (iii) subject to (1) and 2 (i & ii) above in the case of an unmarried or widowed or divorced daughter, upto the date of death or until she gets married or remarried, whichever is earlier; (iv) subject to (1) and 2 (I, ii and III) above, in the case of parents who were wholly dependent on the Government servant immediately before the death of the Government servant, for life (v) dependent disabled siblings Provided that the family pension shall continue to be payable to a childless widow on remarriage, if her income from all other sources is less than the amount of Rs 3500 plus Dearness Relief thereon. Provided further that if the son or daughter of a Government servant is suffering from any disorder or disability of mind including mentally retarded or is physically crippled or disabled so as to render him of her unable to earn a living even after attaining the age of twenty-five years, the family pension shall be payable to such son or daughter for life subject to the following conditions, namely - (i) if such son or daughter is one among two or more children of the Government servant the monthly payment from annuity shall be initially payable to the minor children (mentioned in clause (ii) or clause (iii) of this sub rule) in the order set out in Clause (iii) of sub-rule ( 7) of this rule until the last minor child attains the age of twenty-five and thereafter the monthly payment through annuity shall be resumed in favour of the son or daughter suffering from disorder or disability at mind including mentally retarded or who is physically crippled or disabled and shall be payable to him/her for life; (ii) if there are more than one such children suffering from disorder or disability of mind including mentally retarded or who are physically crippled or disabled, the family pension shall be paid in the order of their birth and the younger of them will get the family pension only after the elder next above him/her ceases to be eligible; Provided that where the family pension is payable to such twin children it shall be paid in the manner set out in Clause (d) of sub-rule (6) of this rule; (iii) the family pension shall be paid to such son or daughter through the guardian as if he or she were a minor except in the case of the physically crippled son/daughter who has attained the age of majority; (iv) before allowing the family pension for life to any such son or daughter, the appointing authority shall satisfy that the handicap is of such a nature so as to prevent him or her from earning his or her livelihood and the same shall be evidenced by a certificate obtained from a Medical Board comprising of a Medical Superintendent or a Principal or a Director or Head of the institution or his nominee as Chairman and two other members, out of which at least one shall be a Specialist in the particular area of mental or physical disability including mental retardation setting out, as far as possible, the exact mental or physical condition of the child; 8
(v) the person receiving the family pension as guardian of such son or daughter or such son or daughter not receiving the monthly payment through annuity through a guardian shall produce a certificate, from a Medical Board comprising of a Medical Superintendant or a Principal or a Director or Head of the Institution or his nominee as Chairman and two other members, out of which at least one shall be Specialist in the particular area of mental or physical disability including mental retardation, once, if the disability is permanent and if the disability is temporary, once in every five years to the effect that he or she continues to suffer from disorder or disability of mind or continues to be physically crippled or disabled. (vi) In the case of mentally retarded son or daughter, the family pension shall be payable to a person nominated by the Government servant and in case no such nomination has been furnished to the Head of office by such Government servant during his lifetime, to the person nominated by the spouse of Government servant, later on. In case no such nomination has been made by the Government servant or by the spouse of Government servant the guardianship certificate obtained under Section 14 of the National Trust Act, 1999 (No. 44 of 1999), from a local level committee, shall be accepted for nomination/appointment of guardian for grant of monthly payment through annuity in respect of beneficiary suffering from Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities. Provided further that the family pension to an unmarried or widowed or divorced daughter shall be subject to following conditions, namely:- (i) (ii) the family pension shall be initially payable to the minor children (mentioned in clause (ii) or clause (iii) of this sub-rule) in the order set out in Clause (iii) of sub-rule (7) of this rule until the last minor child attains the age of twenty-five; and There is no disabled child eligible to receive family pension in accordance with the second proviso of this sub-rule. EXPLANATIONS - (a) An unmarried son or an unmarried or widowed or divorced daughter shall become ineligible for the family pension under this sub-rule from the date he or she married or re-married. (b) The family pension to a son or a daughter shall be stopped if he or she starts earning his/her livelihood In such cases it shall be the duty of the guardian or son or daughter to furnish a certificate to the disbursing authority of monthly payment, once in a year that (i) he or she has not started earning his/her livelihood and that (ii) he or she has not yet married. (c) For the purpose of this sub-rule. a son or a daughter shall be deemed to be earning his/her livelihood if his/her income from other sources is equal to or more than Rs. 3500 plus Dearness Relief thereon Parent shall be deemed to be dependent on the Government servant if their combined income is less than the Rs 3500 plus Dearness Relief thereon. (d) the family pension payable to a childless widow shall be stopped if, after re-marriage, her income from all other sources becomes equal to or exceeds the amount Rs.3500 plus Dearness Relief thereon. 9
(e) a disabled sibling shall become ineligible for the family pension under this sub-rule from the date he or she gets married or he or she starts earning his/her livelihood and income from all other sources becomes equal to or exceeds the amount Rs.3500 plus Dearness Relief thereon. (6) (a) (i) Where the family pension is payable to more widows than one the family pension shall be paid to the widows in equal shares. (ii) On the death of a widow, her share of the family pension shall become payable to her eligible child Provided that if the widow is not survived by any child, her share of the family pension shall not lapse but shall be payable to the other widows in equal shares, or if there is only one such other widow, in full, to her. (b) Where the deceased Government servant is survived by a widow but has left behind eligible child or children from another wife who is not alive, the eligible child or children shall be entitled to the share of family pension which the mother would have received if she had been alive at the time of the death of the Government servant. Provided that on the share or shares of family pension payable to such a child or children or to a widow or widows ceasing to be payable, such share or shares shall not lapse, but shall be payable to the other widow or widows and/or to other child or children otherwise eligible, in equal shares, or if there is only one widow or child, in full, to such widow or child. (c) Where the deceased Government servant is survived by a widow but has left behind eligible child or children from a divorced wife or wives the eligible child or children shall be entitled to the share of family pension which the mother would have received at the time of the death of the Government servant had she not been so divorced. Provided that on the share or shares of family pension payable to such a child or children or to a widow or widows ceasing to be payable, such share or shares, shall not lapse, but shall be payable to the other widow or widows and/or to the other child or children otherwise eligible, in equal shares, or if there is only one widow or child, in full, to such widow or child. (d) where the family pension is payable to twin children it shall be paid to such children in equal shares. Provided that when one such child ceases to be eligible his/her share shall revert to the other child and when both of them cease to be eligible the family pension shall be payable to the next eligible single child/twin children. (7) (i) Except as provided in sub-rule ( 6), the family pension shall not be payable to more than one member of the family at the same time. (ii) If a deceased Government servant leaves behind a widow or widower, the family pension shall become payable to the widow or widower, failing which to the eligible child. (iii) Family pension to the children shall be payable in the order of their birth and the younger of them will not be eligible for monthly payment through annuity unless the elder next above him/her has become ineligible for the grant of family pension. Provided that where the family pension is payable to twin children it shall be paid in the manner set out in clause (d) of sub-rule (6) of this rule (8) Where a deceased Government servant leaves behind more children than one, the eldest eligible child shall be entitled to the family pension for the period mentioned in clause (ii) or clause (iii) of sub-rule 10
(5), as the case may be, and after the expiry of that period the next child shall become eligible for the grant of family pension. (9) Where family pension is granted under this rule to a minor, it shall be payable to the guardian on behalf of the minor (10) (a) Family pension to the parents shall be payable if the parents were wholly dependent on the Government servant immediately before his/her death and the deceased Government servant is not survived by a widow or an eligible child. (b) The family pension, wherever admissible to parents, will be payable to the mother of the deceased Government servant failing which to the father of the deceased Government servant. (11) In case both wife and husband are Government servants and are governed by the provisions of this rule and one of them dies while in service or after retirement, the family pension in respect of the deceased shall become payable to the surviving husband or wife and in the event of the death of the husband or wife, the surviving child or children shall be granted the two family pensions in respect of the deceased parents. (12) Where a female Government servant or male Government servant dies leaving behind a judicially separated husband or widow and no child or children, the family pension in respect of the deceased shall be payable to the person surviving: Provided that where in a case the judicial separation is granted on the ground of adultery and the death of the Government servant takes place during the period of such judicial separation, the family pension shall not be payable to the person surviving if such person surviving was held guilty of committing adultery. (13) (a) Where a female Government servant or male Government servant dies leaving behind a judicially separated husband or widow with a child or children, the family pension payable in respect of deceased shall be payable to the surviving person provided he or she is the guardian of such child or children. (b) Where the surviving person has ceased to be the guardian of such child or children, such family pension shall be payable to the person who is the actual guardian of such child or children. (14) (a) If a person, who in the event of death of a Government servant while in service, is eligible to receive the family pension under this rule, is charged with the offence of murdering the Government servant or for abetting in the commission of such an offence, the claim of such a person, including other eligible member or members of the family to receive the family pension, shall remain suspended till the conclusion of the criminal proceedings instituted against him. (b) If on the conclusion of the criminal proceedings referred to in clause (a), the person concerned - (i) is convicted for the murder or abetting in the murder of the Government servant, such a person shall be debarred from receiving the family pension which shall be payable to other eligible member of the family, from the date of death of the Government servant,: (ii) is acquitted of the charge of murder or abetting in the murder of the Government servant, the family pension shall he payable to such a person from the date of death of the Government servant. 11
(15) (a) (i) As soon as a Government servant enters Government service, he shall give details of his family to the Head of Office; (b) (c) (d) (e) (ii) If the Government servant has no family he shall furnish the details as soon as he acquires a family The Government servant shall communicate to the Head of Office any subsequent change in the size of his family, including the fact of marriage of his child. As and when the disability referred to in proviso to sub-rule (5) of manifests itself in a child or a sibling which makes him/her unable to earn his/her living, the fact should be brought to the notice of the Head of Office duly supported by a Medical Certificate from a Medical Officer, not below the rank of a Civil Surgeon. As and when the claim for monthly payment through annuity arises, the legal guardian of the child or sibling should make an application supported by a fresh medical certificate from a Medical Officer, not below the rank of Civil Surgeon that the child still suffers from the disability. (i)the Head of Office shall, on receipt of the said communication, get it pasted on the service book of the Government servant concerned and acknowledge receipt and all further communications received from the Government servant in this behalf. (ii)the Head of Office on receipt of communication from the Government servant regarding any change in the size of family shall have such a change incorporated in service book. (16) No family pension under this rule shall be granted to a military pensioner, who on retirement from military service, on retiring pension, service pension or invalid pension is governed for the grant of ordinary family pension by Army Instruction 2/S/64 or corresponding Navy or Air Force Instructions and is re-employed in a civil service or civil post before attaining the age of superannuation, and dies while holding a civil post. (17) No family pension under this rule shall be granted to a person who is already in receipt of Family Pension/monthly payment from annuity or is eligible therefore under any other rules of the Central Government or a State Government and/or Public Sector Undertaking/Autonomous Body/Local Fund under the Central or a State Government: Provided that a person who is otherwise eligible for the family pension under this rule may opt to receive family pension under this rule it he forgoes family pension admissible from any ot her source. Provided further that family pension admissible under the Employees Pension Scheme, 1995, and the Family Pension Scheme, 1971 and other statutory contributory pension/family pension schemes shall, however, be allowed in addition to the family pension admissible under these rules. (18) For the purposes of this rule, - (a) "continuous service" means service rendered in a temporary or permanent capacity on posts in connection with the affairs of the Union as member of New Pension Scheme and does not include - (i) period of suspension, if any; and (ii) period of service, if any, rendered before attaining the age of eighteen years; (b) "family" in relation to a Government servant means - (i) wife in the case of a male Government servant, or husband in the case of a female 12
Government servant. (ii) a judicially separated wife or husband, such separation not being granted on the ground of adultery and the person surviving was not held guilty of committing adultery. (iii) Unmarried son who has not attained the age of twenty-five years and unmarried/widowed/ divorced daughter, including such son and daughter adopted legally. (iii) Dependent parents (iv) Dependent disabled siblings 13