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New Pension System (NPS)
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New Pension System (NPS) - Point of Presence (POP)
What do we mean by Pension?
Pension is a social and income security during post retirement life.

What is Defined Benefit (DB) and Defined Contribution (DC) pension schemes?
DB: The pension is determined based on pre determined parameters.

DC: Contribution is decided and pension is based on market driven returns of the accumulated contribution.

NPS is based on defined contributions.

Who can join NPS?
All resident and non-resident Indian citizen aged between 18 and 60 years can enroll themselves into it to make voluntary contribution for the post retirement income.

How can I register myself for NPS?
You need to submit the Registration Form and KYC documents along with contribution to the POP-SP of your choice.

What is POP under NPS?
POP acts as the customer interface for the Non-Government Subscribers/Individual Citizens who wish to open Permanent Retirement Account (PRA) with Central Recordkeeping Agency (CRA) for the purpose of subscribing to the New Pension System (NPS).

What are functions of Point of Presence (POP)?
a)Verification of documents & collect cheques, cash etc.

b)Updating files to CRA

c)Maintaining records of all transactions as per PML act 2002

d)Subscriber Servicing e)Grievance Handling

What is Point of Presence - Service Providers (POP-SP)?
Branches of the registered POPs designated as POP Service Providers (POP-SP) will act as the initial point of contact and collection point for all citizens other than Government Employees desiring to obtain a Permanent Retirement Account Number (PRAN) under NPS.

How can I voluntary open Permanent Retirement Account (PRA) through POP?
Step 1: You have to fill in the Registration Form, provide proof of identity and address, had over the form and documents along with registration charges of POP.

Step 2: POP verifies the documents and digitize them.

Step 3: POP connects to CRA server and transmits its code and information to you.

Step 4: CRA verifies POP code and non-existence of any PRA, if any. Having confirmed these, CRA generates a unique ID and transmit it to the POP.

Step 5: POP hands over the new PRAN to you.

Step 6: CRA sends you Welcome Kit along with I-Card, T-PIN, I-PIN, within one business week.

What are charges for account opening?
New Account Opening Charges (Tier 1 & II both) - Rs. 40/-

Tier II activation for existing subscribers of Tier I - Rs. 20/-
  • The subscriber can contribute the amount through cash, local cheque or demand draft at any chosen POP-SP.
  • No outstation cheques shall be accepted.
1.POP/POP-SP shall collect duly filled NPS Contribution Instruction Slip (NCIS) along with the application form. POP/POP-SP shall also ensure the following points:
2. If the Subscriber is a central government employee who has joined government service on or after 1st January, 2004 (and mandatorily covered under NPS), then he/she can contribute only for Tier II.
3. If the subscriber is a pre 1st January 2004 Government employee, he/she can contribute for both Tiers I as well as for Tier II.
4. The subscriber other than Government Employee can contribute to both Tiers! As well as Tier II Account.

When and how can I make my contribution?
You are required to make the first contribution at the time of applying for registration, subject to further conditions:
  • Minimum Amount per contribution Rs.500/-
  • Minimum Contribution per year Rs.6,000/-
  • Minimum Number of Contribution in a year 4
Over and above the mandated limit of a minimum 4 contributions, you may decide on the frequency of the contributions across the year as per your convenience. No maximum limit has been mandated.

How contribution received from me shall be invested?
NPS offer s choice of investment of your funds:

A. Active Choice: You will have option to decide as to how your pension wealth is to be invested in Equities, Corporate Bonds and Government Securities.
B. Auto Choice: In case you are unable/unwilling to exercise any choice, your funds will be invested in above instruments in accordance with Auto Choice option during your life cycle.

The maximum investment in equity could be 50% of your fund.

Who will manage and invest my fund?
You can choose any of 6 Pension Fund Managers (PFMs) appointed by Pension Fund Regulatory and Development Authority (PFRDA) which regulate NPS to protect the interest of investors.
  • ICICI Pension Funds Management Company Limited.
  • IDFC Pension Funds Management Company Limited.
  • Kotak Mahindra Pension Funds Limited.
  • Reliance Capital Pension Funds Limited.
  • SBI Pension Funds Private Limited.
  • UTI Retirement Solutions Limited.
What will happen if I relocate to another city or country?
The PRAN shall remain the same & you shall be able to access your PRAN from anywhere in India, based on the I-Pin allotted to you by CRA.

Under what circumstances can my account be closed before attaining NRA?
  • Death
  • Account value reduces to zero.
  • Citizenship status changes
Can I be a part of the system after attaining the age of 70 years?
No, you have to compulsorily withdraw from the system on or before attaining the age of 70 years.

What if I don’t exit the system at or before 70 years?
Then on attaining the age of 70 years, your account would be automatically closed with the benefits Transferred to you.

Can I exit the system in phases over the age band 60 to 70 years?
Yes, you can exit.

Can I make contributions of less than INR 500 at a time?
In case of Tier II Account, contribution can be made of INR 250 but it is mandatory to contribute INR 500 in Tier I Account.

Can someone else make contribution on my behalf?
Yes, it is acceptable.

Are there any investment return guarantees?
Returns depend upon the amount contributed & the investment growth.

Will I be permitted to change my Pension Fund Preference?
Yes, you shall have the first opportunity to switch from one Pension Fund to another Pension Fund commencing form May 2010.

What if I do not select any Investment option?
All your contributions will be channeled into Auto Choice Investment.

I am 30 years old & would like to retire at 60, I want pension of INR 2000 per month at today’s prices when I retire. How much do I need to contribute?

You would need a pension wealth of INR 3, 19,000 (at today’s prices) at age 60 to get a pension of INR 2,000 p.m. (at today’s prices). To release this pension wealth, you would need to contribute approx INR 16,600 every year.

On my death, can my nominee continue to operate the account in my name?
No, the balance standing to the subscriber’s account may be transferred into the nominees account after following regular KYC procedure.

What if I contribute less than Rs. 6000 in a year in Tier I Account?
Your Account would become dormant.

How can I reactivate my dormant account?
You would have to bear the default penalty of Rs. 100/year along with minimum contributions due for the period of dormancy in order to reactivate the account.

What happens if my citizenship status changes?
The account under NPS will be closed.

Is it possible to get PRAN CARD in Hindi?
Yes, you can get PRAN CARD in Hindi, for that you have to check the option that PRAN is required in Hindi and the annexure to form UOS-SH1 on page 8 should be properly filled up.

Who regulates NPS ?
To protect the interest of subscribers, Pension Fund Regulatory and Development Authority (PFRDA) Regulates NPS

What is the role of NPS TRUST under the NPS?
PFRDA has established the NPS Trust under Indian Trust Act 1882 which is responsible for taking care of funds under the NPS. The Trust holds an account with the Bank of India, which is designated as the NPS Trustee Bank.

What are functions of NPS Trust?
a. Call for any information or report etc from PF Trustee Bank and Custodian.
b. Issue directions to PF for protecting the interest of subscribers.
c. Appoint a panel of independent auditors to undertake compliance audit.
d. Verify that the Trustee Banks and PFs are strictly performing as per the provisions of the agreement.

What is the role of Central Recordkeeping Agency (CRA)?
NSDL has been appointed as the CRA which provides periodic consolidated PRAN statement, performs centralized record keeping, administration and customer service functions for all the subscribers.

What are services provided by CRA?
a. Providing subscribers with periodic PRAN account statement.
b. CRA sends the status of the grievances to the subscriber for the requests registered by them.
c. Acting upon the instructions of subscribers.
d. Provision of Retirement Account Information to subscriber as to pension wealth accumulated or withdrawable amount.

What do mean by NPS Trustee Bank under NPS?
Bank of India is functioning as a NPS Trustee Bank that would manage the banking of pension funds, the schemes, the guidelines issued by PFRDA, Ministry of Finance and Govt of India.

What does Annuity Services Provider (ASP) stand for?
ASP is responsible for delivering a regular monthly pension to the subscriber for his/ her life.
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