PFRDA (Pension Fund Regulatory and Development Authority), India has opened National Pension System (NPS) / New Pension Scheme to all Indian citizens starting today, on 1st May, 2009.
Its a safe, flexible and portable scheme introduced by Indian Government’s cell PFRDA; to replace the existing System of Pension System in the country and to provide income security after retirement.
PFRDA was established by the Government of India to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds.
National Pension System (NPS) Highlights
Any Indian citizen will be able to start a National Pension System account and can start investing any amount up for a pension.
- Open to all citizens aged between 18-60 years
- Exit age for national pension system will be 60 years.
- Attractive investment schemes to choose from
- Professional record-keeping and fund management
- Technology driven, Transparent fee based system
- Withdrawal facility as and when you wish, under Tier II
- No entry and exit loads
- Multiple fund managers
- Multiple investment options
- Minimum Contribution per installment: Rs 500
- Minimum Contribution per year: Rs 6000
- Minimum Contributions per year : 1
Under this scheme, an investor can deposit their contributions in Bank Branches and Post offices all over the country. Unlike EPF (employee provident fund schemes), there will be only one number allotted to each investor, In case of change of job or location of job, it can be easily transferred to another branch. Each Investor will be allotted a unique 16 digit Permanent Retirement Account Number (PRAN) it will valid for life like current PAN number. There will be no need to open a new account every time you change job or location unlike the current EPF (Employee Provident Fund)
In starting, there will be 23 Points of Presence (POP) including PSU banks and post offices, and they will be provide account opening and other transactions facility. Following is the participating POP list: Allahabad Bank, Axis Bank, Bajaj Allianz General Insurance Co, Central Bank of India, Citibank, CAMS (Computer Age Management Services), ICICI Bank, IDBI Bank, IL&FS Securities, Kotak Mahindra Bank, LIC (Life Insurance Corporation of India), Oriental Bank of Commerce, Reliance Capital, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, SBI (State Bank of India), State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, South Indian Bank, Union Bank of India, UTI.
There will be multiple choices of investment and pension fund managers. All records will be kept by Central Record-keeping Agency (CRA). Central authorities and fund manager will be providing performance reports and NAVs (Net Asset value) regularly, so investor can track and invest accordingly. In Starting, NAVs will be declared once every year and switching fund manager will be allowed only once a year.
Currently seven fund managers have been chosen LIC Pension Fund Limited, SBI Pension Funds Private Limited, IDFC Pension Fund Management Company Limited, Kotak Mahindra Pension Fund Limited, Reliance Capital Pension Fund Limited, UTI Retirement Solutions Limited and ICICI Pension Fund Management Company Limited that will manage investment money for NPS.
Fund Managers will charge very low fund management charges as compared to mutual funds.
Investment Options:
Individual will also have choice to choose from 3 different asset classes: equity (E type), Govt securities(G Type) and Credit Risk-bearing Debt/fixed income based investments (C Type).
Active Choice investment: Investor can mix these three types also as per his choice. Invester actively decide as to how NPS investment is divided into 3 options (E, C and G).
Auto Choice investment: Another option will be Auto Choice life cycle fund and the investment allocation will be done based of investor’s age. In this scheme, equity portion (Asset class E) will be 50 per cent till age 35 after which it will reduce 2 per cent per year until it becomes 10% by age 55. Credit risk portion (Asset class C) will be 30 per cent till age 35 after which it will reduce 1 per cent per year until it becomes 10% by age 55.
Investor will have option of investing monthly/quarterly, but minimum 4 investments in a year will be compulsory.
As per the notification by PFRDA, Currently only half of investment can go into equities, even if investor chooses the equities type funds. This limit will only be reviewed after a year. Deepak Parekh had suggested PFRDA to allow public to invest all saving in equities but board was not ready to do that.
There will be regular account statements and information desks to keep information transparent.
Govt has extended Swavalamban initiative under which it will contribute 1,000 Rs per year (for a period of four years) to every national pension system (NPS) account opened this year with at least a matching contribution from the subscriber.
How to make investment in NPS
Biggest problem is investment is that, a person has to visit personally to POP office every-time he/she need to make contribution. There has been some respite to investors as some of the POPs have started taking deposits online.
India’s largest bank State Bank of India has started taking NPS contribution online through the onlineSBI login account. If you have internet banking of SBI, you can make payment to NPS online. You can check NPS contribution section under Payments/Transfers tab after login.
If you have NPS account opened with ICICI and you also have bank account with ICICI, you can also transfer amount online to NPS account. You need to add NPS account as biller in online ICICI account. You can go to ‘Bill Pay’ section and add a biller under Pension category. Once biller is added you can make payment to this account. The facility for online contribution payment towards national pension system (NPS) is allowed only for NPS accounts opened through ICICI Bank. Your registration for NPS contribution will be cancelled if the NPS account has not been opened through ICICI Bank. Any payments made towards such account will be reversed within three working days. Please make contribution towards the above NPS account only after you have received confirmation for registration into the mail box of your Internet Banking account.
NPS account holders can also invest through SIP or in lump-sum from their ICICI securities account (demat and online share trading account). But as this account is held by limited Indians, its of not much help.
CAMS service for online NPS payment has not started yet and page on their site shows under construction.For Govt Employees:
All new government employees (central and state) will no longer have GPF accounts and NPS account will be mandatory for them. So all who have joined government services after 1st Jan, 2004, will have NPS account.
NPS will work on defined contribution basis and will have two parts – Part I and Part II.
Tier I – Mandatory non-with-drawable Pension Account – Monthly contribution will be 10 percent of basic salary and equal amount will be deposited by Govt. This amount will be kept in a non withdrawal Pension Tier I account.
Tier II – Voluntary with-drawable Savings Account – It will be voluntary tier-II with-drawable account from which individual can withdraw money anytime without giving reason. There will not be any contribution from Govt. side in this account.
Govt Employee can exit after age of 60 years from Tier I Scheme and it will be mandatory for him to invest 40% of pension amount to purchase an annuity through a Life Insurance Company, It will provide pension for the life time. In case of employee wants to leave NPS before age of 60, the mandatory annuity will be 80 per cent of the pension amount.
Charges:
For account opening and issuance of PRAN : 50 Rupees
Annual maintenance charge: 350 280 Rupees per year
Initial subscriber registration charge: 100 Rupees
Transaction charges and contribution upload– 0.25% of the amount, subscribed by the NPS subscriber, subject to minimum of Rs.20 and a maximum of Rs. 25000.
Fund management charge: 0.0009% per year on the fund value.
Fund switch charges: 20 Rupees.
Any other transaction not involving a contribution from subscriber – Rs 20
As of now, this charge appears to be high. Considering 12 transaction a year (one every month), investor has to pay 470 Rs a year. That’s on higher side. These charges will reduce in coming years, as number of subscriber increases.
PFRDA may ask Government to partly pay the maintenance cost to reduce overall cost for investor.
Income tax treatment:
The bad part about NPS is that the returns will be fully taxable not like EPF and PPF. It will come under exempt-exempt-taxed (EET) regime, the amount would be taxed at the time of withdrawal. NPS will not attract any Security Transaction Tax (STT) and Dividend Distribution Tax (DDT).
However PFRDA has suggested government to exempt scheme from tax, but that decision will only be taken by new government.
Update: As per new notification by Finance ministry, under Direct Tax Code (DTC), NPS will also come under EEE and withdrawal will also be non-taxable from 2011. So national pension system could become the best long-term savings option.
From April 1, 2011. Employer contribution from employer towards NPS will not be included in the Section 80 C deductions (Like what happens in case EPF currently). So if employer contributes 50,000 to your account and you contributes same amount, Your 50000 will be available for exemption under 80-C and there won’t be any income tax on rest 50,000 deposited by employer. This increasing your overall deduction claim.
Where to apply for NPS
NPS is available at selected Service Provider (SP) branches of various Point(s) of Presence, Click on link for each POP for branches address. You may also view list by state-city on this link: POP/POP-SP location details.
- Allahabad Bank 033-22104754
- Axis Bank 1800 233 5577 / 1800 209 5577 / 1800 103 5577
- Central Bank of India 022-22153691
- Citi Bank- 1800-180-0123
- Computer Age Management Services Private Ltd. 044 – 30611606 / 07/ 08
- ICICI Bank 022-28308110
- IDBI Bank Toll Free Number for MTNL/BSNL subscribers 1800-22-1070 Toll Free Number for other than MTNL/BSNL subscribers 1800-200-1947
- IL&FS Securities Ltd. 022-42493000
- Oriental Bank of Commerce 011-47651319
- Reliance Capital Ltd. 022-3046 2300
- State Bank of Bikaner & Jaipur 18001806005
- State Bank of Hyderabad 09866582590/04023387471
- State Bank of India 1800 112211
- State Bank of Indore 1800-425-2241
- State Bank of Mysore 1800-425-2244
- State Bank of Patiala 1800 180 2010/0172-2648011
- State Bank of Travancore 18004255566
- The South Indian Bank 1800 843 1800 (Toll free)/1800 425 1809(Toll free)/0484 235 1923
- Union Bank of India 1800-022-2244
- UTI Asset Management Co. Ltd 1800221230
- Kotak Mahindra Bank 1800-102-6022
For more information, application form & offer document, walk into your nearest Service Provider branch of the above-mentioned Point(s) of Presence.
Application Forms
NPS (New Pension Scheme/System) - Application Form (456.0 KiB, 19,163 hits)
New Pension Scheme/System (NPS) - Offer Document (2.9 MiB, 13,975 hits)
New Pension System (NPS) - Welcome Kit (1.2 MiB, 9,165 hits)
NPS (New Pension Scheme) - Investment Guidelines (73.8 KiB, 10,438 hits)
New Pension System (NPS) Contribution Instruction Slip (NCIS) (15.1 KiB, 8,376 hits)
NPS Scheme Preference Change/Switch form (26.9 KiB, 3,221 hits)
Swavalamban Yojana Declaration Form (139.7 KiB, 3,460 hits)
Subscriber request form to change Point of Presence (POP) (63.3 KiB, 3,292 hits)
Subscriber request form to change POP-SP (16.4 KiB, 3,277 hits)
UOS-S12 Withdrawal form for Tier II account under NPS (47.0 KiB, 3,068 hits)
Request form for change in signature and/or change in photograph (12.8 KiB, 2,859 hits)
Request For Change/Correction in Subscriber Master details And/Or Reissue of I-Pin/T-Pin/PRAN Card (402.9 KiB, 3,175 hits)
Request for Activation of Tier-II account under New Pension System (NPS) (215.3 KiB, 3,624 hits)
S1 - Subscriber Registration form to get PRAN (61.3 KiB, 3,378 hits)
Sir, i am Central Govt Employee since 2009 i am under NPS. i want to knw, whether i need to change Bank details in PRAN account if i had resigned from my previous job and joined in some another department where new salary account was opened.
@Preeti
Changing bank account is not mandatory. If you are keeping old account with you and not closing it, there is no need to change bank account in NPS.
If you want to get new bank account linked, you can get it changes in NPS.
Thank you Sir for the reply.
Sir, how to make changes regarding bank account in NPS as i want another account to get linked with it(due to change of job)?
@Neha
You can fill and submit UOS-S06 Change of POP form. It can be downloaded from here: http://www.pankajbatra.com/wp-content/files/UOS-S06-Change-of-POP.pdf
francise for pran card at tripura
@Md Billal
You can find all POP-SP locations in Tripura here: https://www.npscra.nsdl.co.in/pop-sp.php
need to publicity for NPS this best schme for our country for after 60 age Person get pension like in usa other development country
Hello, Sir. Every month 10% of my (Basic Pay + DA) is being deducted towards NPS from my salary. But I want to increase my savings. Is there any option to deposit an amount into my PRAN account other than salary deduction.
@Sandhya
You can directly deposit to your NPS account by filling contribution form at bank.
Also, if you have online SBI account, you can also deposit amount to NPS account using just PRAN.
Thank You, Sir.
@Pankaj : can we increase our TIER-I contribution? Is it possible?
@Varun
You can contribute any amount you want using PRAN number.
@pankaj: Sorry to ask you again, can i contribute to my TIER-I where 10% of my basic will be deducted and same amount will be invested by Government?
@Varun
If you are not a Govt employee and NPS is not linked to your govt salary account, govt won’t contribute to your account.
I am government employee, my NPS is linked to my salary account, my 10% of basic is deducting from the salary every month, now can i make it 15% of deduction from my salary for the TIER-I contribution?
@Varun
I think, like You can deposit extra amount in EPF through VPF, you should be able to ask your employer to deduct extra employee contribution into NPS.
Please note that employer contribution would be limited to 10%.
Thanks for the reply Pankaj.. Enquired in the office.. But they are saying they cant increase the contribution. So i aksed here.. If there is any option to do so, please let me know. Thanks in advance
@Varun
I researched further and could not find any mention of it in official document of NPS.
So, you don’t have any option but to go with what your employer says.
But, you can contribute the extra amount directly yourself. If you have PRAN details, you can contribute yourself from any POP branch, or from online SBI account.
Sir i was in sbi but now i m in iob so how i can trnsfer my pran account from sbi to iob
@Vaskar
I think, you need to fill and submit Form ISS-1 (https://www.npscra.nsdl.co.in/download/government-sector/central-government/forms/IntersectorShifting-Form.pdf)
Dear Sir,
I have added NPS as biller in my ICICI account. Understand that all my online transfer will go to Tier 1 account but to Tier 2. If I want to make payment to Tier 2 I was asked to drop a cheque. is it true? Kindly clarify sir. Thanks Vinay
@Vinayagam
As ICICI does not ask which Tier you wish to invest into while biller payment, I am assuming by default it would be Tier 1 only.
They don’t have any option for Tier 2 online contribution as of now.
Thanks for the clarification sir..
Hello pankaj sir my employer deducted the previous year contribution in current year I.e after one year of my service but not depositing in my. NPS account. Is there any document available which should show they are wrong …. Also i forget to tell you that in my salary. Slip. They are showing that I have received full salary
@Vishal
You can see NPS account statement using your PRAN to know how much contributions have been made to your account.
Mera a/c h govt bnk may mjhey kya karna parrey ga nps account kholney gye..
@Poonam
You need to ask your bank branch if they have NPS facility or not.
Sir, How can I track performance of NPS Tire I & II fund quarterly/monthly interval ?
@Siddharth
You would need to check performance on individual fund manager websites:
DSP BlackRock Pension Fund Managers Private Limited: http://dspblackrockpensionfund.com/InnerPages/disclosure.aspx?Id=1
HDFC Pension Management Company Limited: http://www.hdfcpension.com/about-hdfc-pmc/nav/nav-history.aspx
ICICI Pension Fund Management Company Limited: http://www.iciciprupensionfund.com/displayNAVHistoryNPS.jsp
Kotak Mahindra Pension Fund Limited: http://www.kotakpensionfund.com/navhostory.html
LIC Pension Fund Limited: http://www.licpensionfund.in/index.php?option=com_content&view=article&id=47
Reliance Capital Pension Fund Limited: http://www.reliancepensionfund.com/navs/navhistory.html
SBI Pension Funds Private Limited: http://www.sbipensionfunds.com/historical.html
UTI Retirement Solutions Limited: http://www.utimf.com/UTI-MF-Microsites/retirement/latestNAV.aspx
sir i was in sbi..now i hav to join iob..but sbi sbi is not giving me relieving letter..i have nps account..i want to ask if iob will be able to know about my previous job and nps account if i apply for another one..secondly i also want to know that can two nps account be opened with two diff pan of same person
@Rohit
One person should not hold more than one NPS account. You should use existing account only.
@Hi Pankaj,
I want to change my Address. Which form should I use for that
@Varun
Please use this form: https://www.npscra.nsdl.co.in/download/non-government-sector/all-citizens-of-india/forms/UOS-S2-Subscriber-details-change-l.pdf
I am a business man, can i open a nps ac. If any agent or relationship manager please send me details
@Sankar
Yes, you can open NPS account. Contact your bank for same.
Thanks fr ur kind information sir, my next quarry NSDL opened any membership scheme rs. 500 for PRAN card, some one comes to my house & explain about NSDL multi level member ship plan. Those scheme really authorized or unauthorized? Pls sir replay me as soon as possible.
@Sankar
There is only Rs 50 charge for PRAN card issuance.
Apart from that Initial subscriber registration charge is 100 Rupees. Also Rs 500 is required minimum as initial contribution.
Not sure why Rs 500 was mentioned.
We have not heard about any multi level membership plan. This should be some fraud going on.
sir i was acentral govt. emploee from 2010 to2013. i had aPRAN there. now i regined that and joined a service in state govt. rajasthan. would i have to apply for a new PRAN. If not than how i inform cra about my new employer. to use same PRAN no.
@Prem
You need to use existing account only.
An inter sector shifting form would need to be filled and submitted. https://npscra.nsdl.co.in/download/government-sector/central-government/forms/IntersectorShifting-Form.pdf
Hi Mr. Batra,
Your site is very informative. I was earlier with TechMahindra where I enrolled in NPS in Apr 2013 using Kotak as Fund Manager. Have not made subsequent payments. I have the following questions regarding NPS, kindly clarify –
1. Does every company contribute towards NPS alongside employee’s contribution?
2. I joined another company 8months ago. I did not make any payments towards the NPS account until now after initial subscription into scheme. How can I now restart my contribution every month?
3. I moved to a different city. How do I change my address and phone number details to be registered with CRA and PRAN account?
4. Is there a merit in changing the Fund Managers details? And how do we change it? If we did, do we need to issue instructions to CRA / PRAN?
@Harikumar
1. NPS is not mandatory for all companies. Some company chose to give benefit of NPS to employee, but employer need not to mandatory contribute to NPS account.
2. You need to convert your account from corporate to indian citizen account. You can use this form for same https://npscra.nsdl.co.in/download/government-sector/central-government/forms/IntersectorShifting-Form.pdf. Once this switch is made, you can start monthly contributions from bank account.
3. For details change, you need to fill S2 form: https://npscra.nsdl.co.in/download/non-government-sector/all-citizens-of-india/forms/UOS-S2-Subscriber-details-change-l.pdf
4. You can change scheme preference by filling this form: https://npscra.nsdl.co.in/download/non-government-sector/all-citizens-of-india/forms/Form%20UOS%20S3%20%20Scheme%20Preference%20change.pdf . Not all fund managers are equal, so you can view their past performance and see whats best for you.
3.
sir I submit S2 form before 10 days for reissue of I pin & t pin after 10 days I have not received
@Altaf
Please call 1800-222-080 for more information.
Sir,
I am presently working with Allahabad bank. I have PRAN card.I am appearing in SSC exam. My employer is not giving me NOC, trying to keep me with them. If I will be selected in ssc then is there any problem related to my PRAN. Because I have not shown that I am already a employe if a PSU.
@Vikash
PRAN is issued only once for a person. So in case you join any other employer, you should quote same PRAN for NPS deposits.
You can say that you opened this account yourself as individual.
Sir I have been working in Delhi Jal Board (Autonomous Body) for 16 months and I have a PRAN Card. Now I have been selected in SSC as Data Entry Operator but I have disclosed in SSC that I am working in DJB as DJB was not giving me NOC and relieving letter. Now I want to resign How I can close the account or transfer it.
@Mohd Waseem
NPS account cannot be closed before 60 years age. You will have to provide same PRAN details to new employer.
NPS account can be opened by general public too, so you can tell them you already have a personal NPS account and they can contribute to same.
Thanks for ur reply sir.
Can I give resignation and request to exist from PRAN and get 20% money and invest 80% in Annuity. Can I again apply for new PRAN at SSC. Is it possible. Can new employer ask for information from NPS department regarding my previous transaction and account details from where I was depositing money from
@Mohd Waseem
On resignation of the subscriber, 80% of the corpus has to be annuitized and the subscriber can withdraw remaining wealth.
You can do this, but you don’t have any other option.
There may be issue at issuing a new PRAN with same details (PAN, name etc).
New employer cannot see/view earlier transactions, they can only deposit amount into that.
Thank you very much.
sir i am working in one railway for past
four year but i got another job in
another railway which is in my state. i
have not applied noc because my dept
refuse to give noc and not accept resignation .i have pran no
if i joined in new job can i open
new PRAN but so many friend i have seen that they have two PRAN .is there any problem
arise.can i join new job ? IN this situation what should i do how can i shift my PRAN pls suggest
and guide me.
@Kanhu
NPS balance cannot be transferred. Either you will have to use same account for next employer or get earlier account closed.
dear sir
if i show my pran to new employer how can i continue? new employer asking ddo apo res no. and some other document which is in iss form that i dont know so pls suggest me what to do. if i tell him that ihave opened by myself then what should i do. pls suggest me .
i am absent from duty past four month never back to prev job.
pls tel the exat procedure.
@Kanhu
If you have issues in migration, you should get new account opened only.
pls tel me sir how can i migrate . it means new pran account can created without showing existing
@Kanhu
For migration, you need to submit ISS form (https://npscra.nsdl.co.in/download/government-sector/central-government/forms/Form-ISS-1-InterSector-Shifting.pdf)