Know about National Pension System or NPS

By | March 10, 2016
(Last Updated On: March 10, 2016)

Contents

National Pension System or NPS

What is National Pension System?

The Government of India (GOI) rolled out the NPS for all citizens of India from May 1, 2009 and Corporate sector from December, 2011.

The person (employee/citizen) who joins the NPS will be known as “Subscriber” in the NPS. Under the NPS, each Subscriber will open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).

Under NPS, two types of account would be available to subscribers i.e. Tier I & Tier II; Tier I account – where subscribers contribute his / her savings (may include employers contribution in case of Corporate sector) for retirement into a non-withdrawable account, and a Tier II account – a voluntary savings account from which subscribers are free to withdraw their savings whenever he wishes. The facility of Tier II account was made available from December 01, 2009 to All Citizens of India including Govt. employees and Corporate sector subscribers not mandatorily covered under NPS. An active Tier I account will be a pre requisite for opening of a Tier II.

What are the benefits of NPS?

1.It is voluntary – NPS is open to every Indian Citizen. A subscriber can choose the amount he wants to set aside and save every year.
2.It is simple – All the subscriber has to do is to open an account with any one of POPs (Point Of Presence) and get a PRAN.
3.It is flexible – Subscribers can choose their own investment option and pension fund and see their money grow.
4.It is portable – Subscribers can operate their account from any where in the country, even if they change the city, job or their pension fund manager.
5.It is regulated – NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.

What are the tax benefits of NPS?

Tax benefit to employee:
Individuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer’s contribution as under: –
(a) Employee’s own contribution – Eligible for tax deduction up to 10% of Salary (Basic + DA) under Section 80 CCD(1) within the overall ceiling of Rs. 1.5 lac under Sec 80 CCE.
(b) Employer’s contribution – The employee is eligible for tax deduction up to 10% of Salary (Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs. 1.5 lac provided under Sec 80 CCE.

Tax benefit for self-employed:
Eligible for tax deduction up to 10 % of gross income under Sec 80 CCD (1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE.

Which document can a subscriber use as an investment proof in order to avail the tax benefit?

The print out of the Transaction Statement could be used as a document for claiming Tax benefit.

Who can subscribe in NPS?

Any citizen of India, whether resident or non-resident, aged between 18 – 60 years as on the date of submission of his/her application to the POP/ POP-SP. The citizens can join NPS either as individuals or as an employee-employer group(s) (corporates) subject to submission of all required information and Know your customer (KYC) documentation. After attaining 60 years of age, the subscriber will not be permitted to make further contributions to the NPS accounts.

Can a NRI open a NPS account?

A NRI can open an NPS account. Contributions made by NRI are subject to regulatory requirements as prescribed by RBI and FEMA from time to time. If the subscriber’s citizenship status changes, his/ her NPS account would be closed.

What is the procedure for registration of Subscribers in the CRA system?

Any Individual who wants to get registered as a subscriber and wants to open a Permanent Retirement Account (PRA)(Tier I and/or Tier II) in NPS would submit the duly filled form (Composite application form for subscriber registration) with other supporting KYC documents to POP-SP. For subscribers covered under Corporate sector, the duly filled CS-S1 form needs to be provided to the Corporate office for onward submission to the associated POP.

For only Tier II account, an individual with an active Tier I account needs to approach the associated POP-SP and submit a copy of the PRAN Card along with Tier II activation form (UOS-S10).

A subscriber is required to make the first contribution at the time of applying for registration. (Minimum contribution Rs.500 for Tier I and Rs.1000 for Tier II ) with duly filled NCIS (NPS Contribution Instruction Slip). However, this initial contribution is optional in case of Corporate Model. The POP-SP provides a Receipt no. (as an acknowledgement) to the Subscriber.

Where is the list of POP -SP ?

The list of the POP-SP can be downloaded from the following link: https://www.npscra.nsdl.co.in/pop-sp.php .

How can a Subscriber contribute to NPS?

To contribute in Tier I and Tier II account, the subscriber needs to deposit the contribution amount along with duly filled NCIS (NPS Contribution Instruction Slip) to any POP-SP. In case of Corporate subscribers, contributions are deducted from the Subscribers salary and the Corporate (CHO) will transfer the contribution to the POP who inturn ensures the credit to the respective subscriber accounts. A Corporate subscriber may also make voluntary contributions to his/her account by contacting the associated POP of the Corporate. Susbcriber can also opt for online transfer of funds towards his Tier I and Tier II account. For details the Subscriber may contact the POP-SP providing such facilities.

How many contributions to be made?

In both Tier I and Tier II account there has to be atleast one contribution in a financial year.

How much does a subscriber need to contribute?

A subscriber is required to make his / her first contribution at the time of applying for registration at any POP-SP with NCIS (NPS Contribution Instruction Slip) form.

Subscriber is required to make contributions subject to the following conditions
Minimum amount at the time of Account opening – Rs 500 (Optional for Corporate subscriber)
Minimum amount per contribution – Rs 500
Minimum contribution per year – Rs 6,000
Minimum number of contributions in a year – one

Over and above the mandated limit of a minimum of one contribution, a subscriber may decide on the frequency of the contributions across the year as per his / her convenience. No maximum limit has been mandated.

For Tier II, minimum contribution requirements
1.Minimum contribution at the time of account opening – Rs.1000
2.Minimum amount per contribution – Rs.250
3.Minimum number of contributions in a year – one
4.Maintain minimum balance of Rs.2000 at the end of each financial year.

What happens if subscriber’s contribution is less than Rs. 6000/- in a financial year ? What happens if a subscriber stops subscription in a year?

The subscriber will have to bear a default penalty of Rs. 100 alongwith a minimum contribution of Rs. 500/- and the account would become dormant. In order to reactivate(unfreeze) the account, the subscriber needs to submit the UOS-S10 form to its source POP-SP and would have to pay the minimum contribution along with the penalty. The form can be downloaded from our website www.npscra.nsdl.co.in. The dormant account shall be closed if the account value falls to zero.

When will the units be credited to my NPS account?

For contribution, NAV will be allotted and units will be credited once there is a match between the contribution details submitted by POP / POP-SP to CRA and corresponding funds receipt confirmation given by Trustee Bank. As mentioned in the offer document, there will be a time lag between the time a subscriber deposits Cash/Demand Draft/Cheque with the POP-SP and the of credit of units to the Permanent Retirement Account, which may range upto 15 working days for initial contribution & 7 working days for subsequent contributions. Once the contribution is credited to his / her account, an email alert as well as a SMS alert will be sent to the E-Mail ID and mobile number of the subscriber registered in CRA system.

Can a subscriber make contributions in his / her NPS account before receipt of the PRAN Card?

Under NPS, Subscriber accounts are identified by unique PRAN allotted to them by CRA. If subscriber has opted for both Tier I and Tier II in the registration form , then he can start subsequent contributions in both Tier I and Tier II once PRAN is known and need not wait for receiving the PRAN Kit. However, if he has opted for only Tier I in the registration form , then he needs to submit a copy of the PRAN Card along with the duly filled UOS-S10 form to activate Tier II account.

Where does the Subscriber submit his contribution?

A subscriber can contribute to NPS from any of the POP/ POP-SP despite not being registered with them and from anywhere in India. List of POP-SPs are available at CRA website www.npscra.nsdl.co.in. Subscriber can select nearest POP-SP. In case of Corporate subscribers the Corporate (CHO) will transfer the contribution to the POP who in turn uploads the contribution and ensures credit to the subscriber account. A Corporate subscriber may also make voluntary contributions to his/her account by contacting the associated POP of the Corporate.

Charges

What is the charge structure in NPS?

In case of government subscribers, all the charges associated to Tier I account including Annual PRA Maintenance charge are paid by the employer. Tier II activation charge and transaction charges for Tier II is paid by the subscriber.

The POP charges and the CRA charges are given in the table below. For details of other charges, please refer to the offer document. (link to offer document)

Intermediary Charge head Service charges* Mathd of Deduction
CRA PRA Opening charges
Annual PRA Maintenance cost per account
Charge per transaction
Rs. 50
Rs. 190

Rs. 4

Through cancellation of units at the end of each quarter.
POP (Maximum Permissible charge for each subscriber) Initial subscriber registration

Initial contribution upload

Any subsequent transaction involving contribution upload

Any other transaction not involving a contribution from subscriber

Rs.125

0.25% of the initial contribution amount from subscriber subject to a minimum of Rs.20 and a maximum of Rs. 25,000/-

0.25% of the amount subscribed by the NPS subscriber, subject to minimum of Rs.20/- and a maximum of Rs. 25000/-.

Rs.20

To be collected upfront

To be collected upfront

To be collected upfront

To be collected upfront

*Service tax and other levies, as applicable, will be levied as per the existing tax laws.

These include:

  • Change in subscriber details.
  • Change of investment scheme / fund manager
  • Processing of withdrawal request
  • Processing of request for subscriber shifting
  • Issuance of printed Account statement.
  • Any other Subscriber services as may be prescribed by PFRDA

The PoPs have the option to negotiate on the above charges with the subscribers, but within the prescribed charge structure. The above structure is applicable to both individuals and corporates in the Private (Non-Government) Sector

How are the charges calculated and deducted from my account?

CRA charges are deducted from the subscriber’s account on the last day of the calendar quarter. The billing cycle is 3 months i.e., 26th of the last month of the previous quarter to 25th of the last month of the current quarter.

Let us assume, for the quarter ending September 2014 (billing cycle is June 26th to September 25th , 2014), for a PRAN, following are the applicable charges

Quarterly AMC – Rs. (190/12)*3 = 47.50

Account Opening charges (-One Time-) – Rs. 50

Charge for one Transaction – Rs. 4

Total Charges excluding taxes – Rs. 101.50

Service Tax including Education Cess – Rs. 12.54

Total Charges – Rs. 114.04.

The value of holding of the subscriber as on September 29, 2014 is Rs. 10000 i.e., E – Rs.5000 (50%); C -Rs. 3000 (30%) and G – Rs. 2000 (20%).

The charges of Rs. 114.04 will be recovered in the ratio of holdings

Recovery
E – 50% of Rs. 114.04 = Rs. 57.02
C – 30% of Rs. 114.04 = Rs. 34.21
G – 20% of Rs. 114.04 = Rs. 22.81
Let us assume that as on September 29, 2014, NAV for asset class E, C and G is 13, 12 and 11 respectively.
Units redeemed from E – 57.02/13= 4.386
Units redeemed from C – 34.21/12= 2.850
Units redeemed from G – 22.81/11= 2.073

Withdrawal

What types of Withdrawals are allowed under the National Pension System?

As per Pension Fund Regulatory & Development Authority (PFRDA) Exit Rules, following Withdrawal categories are allowed:
a) Upon Normal Superannuation – At least 40% of the accumulated pension wealth of the subscriber has to be utilized for purchase of annuity providing for monthly pension of the subscriber and the balance is paid as lump sum to the subscriber.
In case the total corpus in the account is less than Rs. 2 Lakhs as on the Date of Retirement (Government sector)/attaining the age of 60 (Non-Government sector), the subscriber (other than Swavalamban subscribers) can avail the option of complete Withdrawal.

b) Upon Death – The entire accumulated pension wealth (100%) would be paid to the nominee/legal heir of the subscriber and there would not be any purchase of annuity/monthly pension.

c) Exit from NPS Before the age of Normal Superannuation – At least 80% of the accumulated pension wealth of the subscriber should be utilized for purchase of an annuity providing the monthly pension of the subscriber and the balance is paid as a lump sum to the subscriber.

What are the different types of Withdrawal Forms available?

Based on the different types of Withdrawal request, following forms are required to be submitted to the concerned POP/POP-SP

Type Of Withdrawal
Request Central/State Government Corporate/All Citizens of India Sector Swavalamban (NPS-Lite) Sector
Superannuation 101-GS 301 501
Premature Exit 102-GP 302 502
Death 103-GD 303 503

Where are the Withdrawal forms available to the subscribers?

Withdrawal forms are available on the NSDL-CRA Corporate Website (http://www.npscra.nsdl.co.in). Subscriber can also send an email to “npsclaimassist@nsdl.co.in” or “info.cra@nsdl.co.in” to get the Withdrawal forms in their e-mail ID.

What is an Exit Claim ID and what is its relevance?

For any superannuating subscriber/attaining 60 years of age, CRA generates a Claim ID six months prior to the attaining 60 years of age. CRA intimates the generation of Claim ID to the subscriber / POP-SP vide e-mails, letters, SMS. POP/POP-SP can also view the Claim IDs generated for underlying subscribers at ‘Welcome Page’ in CRA site.

For Pre-mature Exit and Death cases, the Claim IDs will be generated by the associated POP-SP or CRA when the Withdrawal request for the same is received.

If the Claim ID is not generated for a subscriber even if the date of birth is less than six months away, the concerned POP-SP should update the correct retirement date in the CRA system.

Can a subscriber directly submit the Withdrawal request form to CRA?

No, the Withdrawal forms should be submitted to the associated POP/POP-SP (through the POP in case of Corporate model subscriber) for onward submission at CRA. POP/POP-SP should stamp and authorise the form after performing the necessary due diligence for the form and the supporting documents. The duly authorised forms and the documents can be then be forwarded to CRA for further processing.

What are the documents to be submitted while requesting for Superannuation & Pre-mature Exit?

Following documents are to be submitted alongwith the completely filled Withdrawal form for Superannuation & Pre-mature Exit at CRA:

• Covering Letter from the associated POP/POP-SP to be submitted alongwith the Withdrawal form
• Advanced stamped receipt needs to be duly filled and cross-signed on the Revenue stamp by the subscriber.
• Original PRAN card or affidavit stating the reason for non-submission of PRAN card in case of Non submission of PRAN card
• KYC documents (address and photo-id proof) attested by mapped POP/POP-SP.
• ‘Cancelled Cheque’ (having subscriber’s Name, Bank Account Number and IFS Code) or ‘Bank Certificate’ on Bank Letterhead having subscriber’s name, Bank Account Number and IFS Code required to be submitted as bank proof. ‘Copy of Bank Passbook’ can be accepted, however, it should have subscriber’s photograph on it and should be self attested by the subscriber.

What are the documents to be submitted while requesting for Withdrawal due to death of a subscriber?

Following documents are to be submitted alongwith the completely filled Withdrawal forms at CRA:

• Covering Letter from the associated POP/POP-SP to be submitted alongwith the Withdrawal form
• Advanced stamped receipt need to be duly filled and cross-signed on the Revenue stamp by the subscriber.
• Original PRAN card OR affidavit stating the reason for non-submission of PRAN card in case of Non submission of PRAN card
• KYC documents (address and photo-id proof) attested by mapped POP/POP-SP.
• ‘Cancelled Cheque’ (having subscriber’s Name, Bank Account Number and IFS Code) or ‘Bank Certificate’ on Bank Letterhead having claimant’s name, Bank Account Number and IFS Code required to be submitted as bank proof. ‘Copy of Bank Passbook’ can be accepted, however, it should have claimant’s photograph on it and should be self attested by the claimant.
• Original Death Certificate issued by the Local Authority.
• In case the Nominee details are not available in the CRA system, a legal heir certificate OR a certified copy of family member’s certificate issued by Executive Magistrate is required indicating the relationship of the claimant with the deceased as well as supporting documents is to be provided. If all the legal heirs are not claiming the pension funds, Relinquishment deed to be submitted from all the legal heirs (except the Claimant) on a Stamp paper of Rs. 100/-alongwith the KYC documents (Photo ID proof and Address proof) of all the legal heirs duly attested by the mapped POP/POP-SP. Also an Indemnity bond needs to be obtained from the claimant stating the responsibility for claiming on behalf of all the legal heirs.
• POP/POP-SP has to submit the Death IRA compliance certificate if the subscriber’s PRAN is Non-IRA compliant.

 

What are the major reasons for ‘Rejection’ / ‘On Hold’ of a Withdrawal request?

Some of the major discrepancies observed at CRA in the withdrawal forms are listed below:

a) KYC documents (Photo-ID Proof and Address Proof) not attested by mapped POP/POP-SP.
b) Original PRAN card OR Affidavit in case of non-submission of PRAN card not submitted along with the Withdrawal form.
c) ‘Date of Retirement’ mentioned on the Withdrawal form does not match with date mentioned on the POP/POP-SP covering letter. Hence, POP/POP-SP confirmation is required for correct Date of Retirement.
d) Covering letter from the associated POP/POP-SP not submitted along with the Withdrawal form.
e) The associated POP/POP-SP has not authorized the Withdrawal form.
f) Withdrawal fund allocation percentage not provided in the Withdrawal form.
g) Nomination details/Witness (to nomination) details not provided in the Nomination form.
h) Address mentioned in the Withdrawal form is different from the Address Proof provided.
i) Name provided in the Withdrawal form is different from the name provided in the KYC documents (Photo ID and address proof).
j) Photograph is not ‘self attested’ by the subscriber/claimant.
k) In case of death, Withdrawal request not submitted by the registered nominee as per the CRA system.

If the subscriber is superannuating six months from now, when the Withdrawal form is be submitted and when the Withdrawal request will get processed at CRA?

If the subscriber is going to superannuate six months from now, the subscriber can submit his Withdrawal Form anytime after the generation of Claim ID, however the Withdrawal request will be processed only after completion of Superannuation age/ Date of Retirement (as per the CRA records).

Can Claim ID be generated in case of Pre-mature Exit?

In order to generate Claim ID for Withdrawal of NPS funds in case of Pre-mature Exit, the subscriber would have to contact the POP-SP for generation of Claim ID.

How superannuated subscriber can capture the online Withdrawal request?

Subscriber can capture the online Withdrawal request six months in advance from the date of superannuation/ attaining the age of 60. Subscriber can submit the request by logging into the CRA website (www.cra-nsdl.com) under the menu ‘Exit Withdrawal Request’).

Can a subscriber claim for 100% Withdrawal in case of attaining 60 years of age (Superannuation)and Pre-mature Exit?

In case of Pre-mature Exit, 100% is not allowed. However, in case of Superannuation, a subscriber can claim 100% Withdrawal if the total accumulated corpus is less than Rs. 2,00,000 at the time of Superannuation/attaining age of 60 years.

Who can claim the accumulated wealth in case of subscriber’s death?

Nominee(s) registered in the CRA system can submit the Withdrawal request to CRA through the subscriber’s associated POP/POP-SP (through the associated Corporate in case of Corporate model subscribers). If the Nominee was not registered with CRA, legal heir(s) can submit the Withdrawal request.

In case of death of any NPS subscriber who had nominated two nominees (a major and a minor), can the claim be made by the major claimant only?

Withdrawal form needs to be submitted by all the nominees registered in CRA system. In case the nominee is a minor, Withdrawal form has to be submitted by the guardian along with the birth certificate of the minor.

How does the subscriber / claimant receives the Withdrawal proceeds?

The Withdrawal proceeds are credited electronically to the bank account of the subscriber or claimant (as per the bank details provided in the Withdrawal form).

Whether Withdrawal proceeds can be provided through Cash or Demand Draft?

No, Withdrawal proceeds are credited electronically to the bank account of the subscriber or the claimant, as the case maybe. It is necessary for the subscriber /claimant to have a bank account.

What communications are sent to subscribers providing status of his /her requests?

Following communications are sent to the subscribers during the Withdrawal process:
• E-mail, letter and SMS alert to NPS subscribers at the time of generation of Claim ID
• E-mail & letter is sent to the claimant for any discrepancy observed
• At the time of acceptance of request, Transaction Statement is sent to the subscriber through email
• E-mail to subscriber intimating the Fund Transfer Details of the credit remitted to claimant/ASP bank account

How can one check the status of Withdrawal request?

Withdrawal status can be checked through the ‘Limited access View’ functionality which is available at CRA website (www.cra-nsdl.com). POP/POP-SP and subscriber can also check the status under the menu ‘Exit Withdrawal Request’ by logging into website.

Where can a subscriber enquire about the withdrawal procedures under NPS?

The subscriber can either send an email to info.cra@nsdl.co.in or npsclaimassist@nsdl.co.in case of any query pertaining to withdrawal or may get in touch with his/her associated POP/Corporate. Withdrawal related guidelines are also available on the PFRDA and CRA website.

What is a Deferred Lump-sum Withdrawal?

Subscribers exiting NPS on account of Superannuation can opt for deferring the Withdrawal of their lumpsum share (maximum 60%) to a maximum period of 10 years or 70 years of age (whichever is earlier).

What happens to the subscriber’s investments if he / she discontinue the scheme?

If a subscriber discontinues his/her investments under the scheme and the minimum contributions are not made as stipulated, the account will be frozen and can be reactivated only by paying the penalty alongwith the minimum contribution.
However, if a subscriber wishes to exit from NPS before attaining the age of 60, he/she can withdraw upto 20% of the sum accumulated till that point of time. The subscriber has to buy annuity with the rest of the money. The commencement of the annuity depends on the annuity plan / scheme offered by the ASPs.

What is Annuity?

An annuity is a financial instrument which provides for a regular payment of a certain amount of money on monthly/quarterly/annual basis for the chosen period for a given purchase price or pension wealth. In simple terms it is a financial instrument which offers monthly/quarterly/annual pension at a specified rate for the period you chose.

In the context of NPS, Annuity refers to the monthly sum received by the subscriber from the Annuity Service Provider (ASP). A percentage of the pension wealth as decided by the subscribers (minimum 40% & 80% is to be invested with ASP in case Withdrawal is due to Superannuation & Pre-mature Exit respectively) is utilized for purchase of Annuity from the ASP.

Who is the Annuity service provider?

Indian Life Insurance companies which are licensed by Insurance Regulatory and Development Authority (IRDA) are empanelled by PFRDA to act as Annuity Service Provider’s to provide annuity services to the subscribers of NPS.

What is a Deferred Annuity?

As per PFRDA Exit Rules, subscribers exiting NPS on account of Superannuation or Pre-mature Exit can defer purchase of Annuity (minimum 40% & 80% is to be invested with ASP in case Withdrawal is due to Superannuation & Pre-mature Exit respectively) for a maximum period of 3 years.

What happens if the subscriber dies after attaining the age of 60?

The mode and manner of payment of amount (if any available) will depend on the type of annuity plan / scheme selected by the subscriber while buying the annuity.

What happens to the Tier II corpus of a subscriber when exiting from NPS?

The units available in the Tier II account of the NPS subscriber who has submitted a Withdrawal request for Tier I at CRA (provided the request stands approved from the concerned authority) are redeemed alongwith the Tier I balance. The funds redeemed are transferred to the account provided by the subscriber in the Withdrawal form.

How can a subscriber redeem from Tier II account?

In order to withdraw from Tier II account, the subscriber needs to submit a duly filled UOS-S12 form to the associated POP-SP. If the request is entered and authorised in CRA system by the POP/POPSP before 11:45 PM, then it goes for same day’s processing, or else it goes for the next business day. The redemption amount may vary due to the variation of NAV. Units are redeemed based on the NAV declared at the end of the processing day. On T+3 working days, (T being the date of processing) the funds are transferred from the Trustee Bank to subscriber’s bank account as registered in the CRA system.

Can a Subscriber change his POP or POP-SP?

A subscriber has been provided with the option of changing his/her POP/POP-SP. A subscriber under the Corporate model however cannot change his/her associated POP/POP-SP on his own until he/she changes employment or moves out of the sector. The Subscriber cannot opt for different POP-SPs for his/her Tier I and Tier II accounts respectively.

What is the procedure for changing the POP-SP?

A subscriber can change the POP-SP by submitting form UoS-S5 to the POP-SP associated at present or the new POP-SP

What happens to associated POP-SP/Corporate in case a subscriber gets transferred/changes employment?

In case of transfer (change of location/job), subscriber’s PRAN remains the same and for shifting of account to another POP-SP, he may submit the UOS-S5 form to his / her existing POP-SP or the UOS-S6 form to the POP SP belonging to another POP to avail their services. In case of the Corporate Sector subscriber, if the subscriber changes his / her job and joins an organisation not registered under NPS, the subscriber can continue the PRAN under the All Citizen of India sector. The subscriber needs to submit an Inter Sector Shifting (ISS-1) Form to the POP-SP with whom he / she wants to be associated in NPS. The list of the POP-SP can be downloaded from the following link: https://www.npscra.nsdl.co.in/pop-sp.php . If the subscriber changes his / her job and joins an organisation registered under NPS, the subscriber can continue the PRAN under the new Corporate by submitting the CS-S3 form.

Who can open a Tier II Account?

Any subscriber who has an active Tier I account can activate his / her TIER II account through his / her associated POP-SP. A subscriber can also open Tier I and Tier II together by filling up a composite application form.

Are bank details mandatory for Tier II account?

Yes, bank account details are mandatory for Tier II account. After a withdrawal request is processed in Tier II account , the funds are transferred by Trustee Bank to the subscriber’s bank account as per these details.

If I have invested in any other Provident Fund, can I still invest in NPS?

Yes. Investment in NPS is independent of your contribution to any Provident Fund.

Whether private employee covered under Employees Pension Scheme (EPS-95) or corresponding State Government Schemes will be eligible for contributing under NPS?

Yes, they can independently join NPS and contribute in Tier I and Tier II account.

Where can a Subscriber get the Subscriber Registration Forms?

Application form for registration of Subscribers can be downloaded from the CRA website www.npscra.nsdl.co.in
Link: Subscriber Corner > Forms > for Subscriber registration.

Is online registration possible?

Yes. PRAN can be generated online. For further details the Subscriber is required to contact the POP providing this facility.

How can a subscriber check the status of his PRAN application?

Subscriber can check the status by accessing CRA website: https://cra-nsdl.com/CRA/ by using the 17 digit receipt number provided by POP-SP or the acknowledgement number allotted by CRA-FC at the time of submission of application forms by POP-SP. The subscriber can also check the status with the associated nodal office. Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. CRA also intimates the Subscriber about the despatch details once the PRAN kit for the subscriber is dispatched.
Under the Corporate model the status of the request or the receipt no. (if provided) needs to be checked with the respective POP / Corporate.

What is PRAN and PRAN Kit?

On successful registration, a PRAN (Permanent Retirement Account Number) will be allotted to the subscriber. A PRAN Kit containing PRAN card, Subscriber details (referred as Subscriber Master List) and an information booklet is sent to the subscriber’s registered address. The T-Pin and I-Pin are sent separately to the registered address. In case of the Corporate Sector subscriber, the PRAN Kit alongwith T-PIN & I-PIN will either be sent to the subscriber’s registered address or at the Corproate Head Office as per the option selected by the Corporate.

The PRAN Card is a document with PRAN, subscriber’s name, father’s name, photograph and signature/thumb impression. This card proves the completeness of information in the CRA system. A copy of the card is required for Tier II activation and also for subsequent contribution in Tier II account.

The Subscriber Master List shows all the information as provided by the Subscriber in his / her application and accordingly captured in CRA system. A subscriber may verify the correctness of the information submitted for registration by looking at the Subscriber Master List.

What is the use of I-PIN ?

The I-PIN is the credential provided to the Subscriber for accessing their NPS account online at www.cra-nsdl.com .

How much time is required for registration?

After the registration form is submitted to DDO, the same is forwarded to a CRA – Facilitation Centres after authorisation by the PAO. PRAN is generated and the PRAN card is printed and despatched within 20 days from the date of receipt of duly filled registration form at the CRA – Facilitation Centre.

How do subscribers come to know about their PRAN?

Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. For security reason, only the last four digits are mentioned in the alert. Subscribers can know the PRAN on receipt of the PRAN Kit or they can also approach their POP-SP for the PRAN.

Can a CRA-FC reject the Subscriber application forms?

POP-SP will perform verification checks, such as whether name is mentioned, photograph is attached, signature is present, other mandatory fields (other supporting documents for KYC norms as prescribed by PFRDA) are properly filled, scheme preference details are mentioned as required, first time contribution amount etc. before accepting the form. In case the application form is not filled with all the required details, CRA-FC will not accept the registration form. CRA-FC will intimate subscribers’ POP – SP regarding rejection of forms.

Whom to contact for non receipt of PRAN Card?

PRAN Card is despatched to the registered address within 20 days from the day of receipt of duly filled registration form at the CRA-FC office. In case of a Corporate subscriber, the PRAN Card will either be sent to the subscriber’s registered address or at the Corproate Head Office as per the option selected by the Corporate. During this period, a subscriber can go to https://cra-nsdl.com/CRA/ and check the status of PRAN kit in CRA website https://cra-nsdl.com/CRA/ using the 17 digit receipt number provided by POP-SP. The subscriber can also contact his / her associated POP-SP.
Subscribers registered through a Corporate may please check with their office/service provider for the status of request on the basis of receipt no. (if provided) needs to be checked with the respective POP / Corporate.

Can a subscrber obtain/use more than one PRAN?

No, multiple NPS accounts for a single individual are not allowed and there is no necessity also as the NPS is fully portable across sectors and locations.

Is selection of investment option – Auto or Active choice mandatory?

Yes, but in case investment option is not mentioned, all contributions would be channelled into auto choice, a Lifecycle fund. However, investment option can be changed subsequently only once in a financial year.

What are the different options in the IVR?

Subscribers have the following options in IVR
1.Change of T-PIN.
2.Check scheme preference and holding details.
3.Check the status of any change request (like change of address, nomination etc.).
4.Check details of last contribution credit and last withdrawal request(for Tier II only).
5.Request for SOT for last 3 financial years.
6. Check status of Subscriber Shifting
7. Speak to a customer service executive

Can a subscriber get loan under NPS ?

At present, interim utilization of pension wealth (such as availing of loan) by the subscriber before exit is not allowed under NPS. However, in line with the PFRDA Act 2013, PFRDA is considering the option of interim withdrawal and, the same is yet to be finalized. For more detailed guidelines/circulars regarding withdrawal, you may visit PFRDA website (www.pfrda.org.in) as well as on CRA website (www.npscra.nsdl.co.in).

Who is the regulator for NPS?

Pension Fund Regulatory and Development Authority (PFRDA): A regulatory body set up by the Government of India to develop and regulate the pension market in India. PFRDA is the regulator for NPS.

Who are the other entities in NPS?

NPS architecture consists of NPS Trust which is entrusted with safeguarding subscribers interests, a Central Recordkeeping Agency (CRA) which maintains the data and records, Point of Presence (POP) and aggregators as collection and distribution arms, competing pension fund managers for generating and maximizing returns on investments of subscribers, custodian to take care of the assets purchased by the Fund managers and Trustee bank to manage the banking operations. The entities involved in NPS are as follows
NPS Trust : The National Pension System Trust (NPS Trust) was established by PFRDA on 27th February, 2008 with the execution of the NPS Trust Deed. The NPS Trust has been set up and constituted for taking care of the assets and funds under the National Pension System (NPS) in the interest of the beneficiaries (subscribers). Individual NPS subscribers shall be the beneficiaries of the NPS Trust. The NPS fund are managed by the Board of Trustees to realize and fulfill the objectives of the NPS Trust in the exclusive interest of the Subscribers.
Central Recordkeeping Agency (CRA): The recordkeeping, administration and customer service functions for all subscribers of the NPS are being handled by NSDL e-Governance Infrastructure Limited, which is acting as the Central Record-keeper for the NPS.
Pension Fund Managers (PFMs): The Pension Fund Managers (PFMs) means an intermediary which has been granted a Certificate Of Registration by the Authority as a Pension Fund for receiving contributions, accumulating them and making payments to the subscriber in the manner as may be specified by the Authority.
Trustee Bank : Axis Bank Ltd has been appointed by PFRDA as the Trustee Bank for National Pension System (NPS) effective from 1st July, 2013. Trustee Bank as an intermediary is responsible for the day-to-day flow of funds and banking facilities in accordance with the guidelines/ directions issued by the Authority under NPS. It receives NPS funds from all Nodal Offices and transfers the same to the Pension Funds /  Annuity Service Providers/other intermediaries as per the operational guidelines.
Annuity Service Providers (ASPs): ASPs would be responsible for delivering a regular monthly pension to the subscriber after he/she exit from the NPS. ASP have been appointed by PFRDA.
Point of Presence (POP): Points of Presence (POPs) are different financial Institutions who acts as the first points of interaction of the NPS subscriber with the NPS architecture. The authorized branches of a POP, called Point of Presence Service Providers (POP-SPs), will act as collection points and extend a number of customer services to NPS subscribers.
Central Recordkeeping Agency Facilitation Center (CRA-FC): CRA-FC is the entity appointed by NSDL to extend various services under NPS, to its users across the country. The entities who have been appointed as CRA-FC shall establish multiple branches across the country to provide services to the POPs and POP-SPs.
Corporate Head Office (CHO): A Corporate wishing to provide NPS to its employees under the Employer – Employee relation, can join NPS by registering as a Corporate Head Office through a POP. The different branches of the corporate can  be registered as a Corporate Branch Office (CBO).

What are the services offered by CRA?

Following are the services offered by CRA to the Subscribers
1.CRA shall register the Subscribers and allot unique Permanent Retirement Account Number (PRAN) to them.
2.CRA shall also issue a PRAN card and User-ID, I-Pin and T-Pin to access CRA website and CRA call centre.
3.CRA shall maintain the Permanent Retirement Account of the Subscribers and shall facilitate the creation of units in Subscribers account as per the contribution details and funds received from the POP-SP Offices.
4.At the end of every financial year, CRA shall send a Transaction Statement to the Subscriber containing the details of the transactions in Subscribers’ Permanent Account.
5.CRA shall register the grievances and send the resolution details to the Subscribers.
6.CRA shall provide I-Pin based login for subscribers to view their account details in CRA website https://cra-nsdl.com/CRA/.

What is the procedure for registration of a Corporate in the CRA system?

Any Corporate who wants to get registered in NPS would submit the duly filled CHO-1 Form (Form for Registration of Corporates) with other supporting KYC documents to a POP of its choice. The POP will verify the Form and the documents and will forward the same to the CRA for registering the Corporate. Once the Corporate is registered in the CRA system the Corporate is issued a CHO Registration Number.

Maintenance 

What will a Subscriber do if there are changes in his PRAN data?

A subscriber can request for change / correction in personal details, nomination details, bank details, reissue of I-Pin/T-Pin/PRAN Card to the POP-SP. A subscriber can also update his / her photograph and signature by submitting written request to the POP-SP.

Subscriber needs to submit the following forms for change request –
1.Form S2/CS-S2 – for change in personal or nomination details or request for re-issue of T-PIN/I-PIN or Reprint of PRAN card.
2.Form S3/CS-S3- Request for change in Scheme Preference or Switch or change change of employment.
3.Form S7 – Request for change in Photograph and/or Signature.

What are the details of Subscriber, which a POP / POP-SP can update?

POP-SP can update the following requests of the associated subscriber
1.Change in Personal details including Bank details
2.Change in Nomination details
3.Reissue of I-PIN and T-PIN
4.Reprint of PRAN Card
5.Change in Photograph and/or Signature
6.Change in scheme preference
7. Change in Employment details for Corporate subscriber

For any type of account maintenance, a subscriber needs to submit a request to the POP-SP through whom the Tier I account is activated.

For contribution of both Tier I and Tier II however, a subscriber can go to any POP-SP.

Can a subscriber view the status of its request for any change in personal details, scheme setup, switch etc.?

Yes, subscriber can check with their POP-SP or can call at CRA’s toll free number 1800 222 080 for the status of pending request. Subscriber can also login to https://cra-nsdl.com/CRA/ using the I-PIN and check the status.

Can a minor be a nominee?

Yes, minor can be a nominee. In such case, subscriber will be required to provide guardian’s details and date of birth of the minor.

Is there any restriction on number of Nominees?

Yes. Subscriber will be allowed to register upto three nominees only.

How to request for a duplicate PRAN card?

In case of loss or damage of PRAN card , the subscriber needs to submit a duly filled S2 form to the respective POP-SP. After verifying the form, the POP/POPSP will enter and authorise the request in the CRA system. Subsequently, the request is processed by CRA and a fresh PRAN Card is printed and sent to subscriber’s registered address. In case of a Corporate subscriber, the subscriber needs to submit a duly filled CS-S2 form to the respective POP, and the PRAN card will either be sent to the subscriber’s registered address or at the Corporate Head Office as per the option selected by the Corporate. This is a chargeable transaction.

Can a subscriber get a New I-PIN and T-PIN if he losses / forgets the same.

The subscriber can submit a duly filled S2 form to the respective POP-SP for re-issue of I-PIN / T-PIN. A fresh I-PIN / T-PIN will be sent to subscriber’s registered address. This is a chargeable transaction.

Also the subscriber can use the OTP /Instant Reset of I-PIN facility to reset the I-PIN free of cost through the following link: https://cra-nsdl.com/CRA/raisePasswordSubscriber.do?ID=null&getName=Change Password

For the T-PIN, the subscriber can call at the CRA’s toll free number 1800 222 080 and access the Interactive Voice Response (IVR) and reset the T-PIN.

Can a subscriber reset the I-PIN (Internet Password) online?

Yes, the subscriber has an option to reset his/her I-PIN online. The request needs to be initiated online in CRA system by clicking on the “Forgot Password” link and selecting the “Instant Reset I-PIN”. Subscriber needs to fill the required details and should select any one of the following options:
1) Go to POP / POP-SP : Here the subscriber needs to print the acknowledgement and handover the same to the nearby POP-SPs for authorization irrespective of whether the subscriber is associated with it or not. After successful authorization by the POP-SPs, subscriber can use the new password (provided during the initiation of the request) for login in the system.
2) Generate OTP : Here once the subscriber has selected this option a One Time Password (OTP) will be sent to the subscribers registered Mobile Number. After receiving the same the subscriber needs to input this OTP in the system, which will then ask the subscriber to input a password of his / her choice. Once the subscriber has completed this, the subscriber can login in the system with the help of the password provided by him / her.

Can a subscriber reset the T-PIN (Telephonic Password)?

Yes, the subscriber has an option to get his/her T-PIN reset. The subscriber can call the CRA toll free number 1800-222-080 to access IVR (Interactive Voice Response) system. After selecting the appropriate option, system will prompt the subscriber to reset T-PIN by providing the existing T-PIN and the required new T-PIN. In case subscriber has forgotten T-PIN, upon successful verification of the personal details, the subscriber will be transferred to a helpline executive to enable him/her to change the T-PIN online.

Will a Subscriber get an Annual Account Statement for his PRAN?

The Annual Account Statement as of March 31st of every year, will be sent to the registered address once in a year. Also if a subscriber wishes to have a transaction statement, on an adhoc basis, they can get in touch with their POP/POP-SP. A subscriber can also view/print the transaction statement, by logging into CRA website https://cra-nsdl.com/CRA/ using the I-PIN. A subscriber needs to follow below mentioned path Transaction Statement —> Mention the PRAN. After submitting the PRAN; mention the date range (period of transaction statement. Date range should not be more than three months. Click on to generate statement. Subscribers can also view the Statement of Holding by using the I-PIN. They can also request for a transaction statement through IVR (CRA toll free number) using the T-PIN.On placing a request through the T-PIN the Subscriber is provided with the Transaction Statement on the registered e-mail ID in the CRA system.

How can a subscriber request for Transaction Statement using IVR?

After accessing the IVR using the T-PIN, subscribers need to select the option of “Other Services” and specify the financial year for which he wants the statement. Subscribers will instantly get an acknowledgement number on receipt of the request and a transaction statement is sent to the registered email ID. This facility is only available to subscribers whose email ID is registered with us.

How do subscribers check the status of the change request through IVR?

After accessing the IVR using the T-PIN, subscribers need to select the option of checking the status of the change request and input the receipt number issued by the POP-SP. Subscribers can also speak to the call centre executive to check the status. In the absence of receipt number (in case of Corporate subscriber), the subscriber can aproach the POP for the status of the change request.

Scheme Details

What is meant by Scheme Preference ?

Scheme Preference is the Pension fund schemes option chosen by the subscriber for investing the pension contribution amount. In case of the Corporate, the corporate can either select the Scheme Preference or can give such option to its employees / subscribers.

The NPS offers two approaches to invest in your account
1.Active choice – There are Individual Funds (E, C and G Asset classes). In active choice, the Subscriber has to select a Pension Fund Manger and has to mention the ratio of funds to be invested among E, C & G.
2.Auto choice – There is a Lifecycle Fund and the subscriber has to select a Pension Fund Manager and his / her funds will be invested as per the Life cycle fund matrix on the basis of the age of the subscriber.

For both Tier I and Tier II, the subscriber has been given the flexibility to choose any one out of available Pension Fund Managers(PFMs) and also decide the percentage in which the selected PFM will invest the funds.

If a subscriber chooses Active Choice, he can specify the percentage in which his / her money is to be invested in these asset classes. However, allocation in Equity cannot be more than 50%.

If a subscriber opts for Auto Choice, system will automatically calculate the asset allocation percentages based on the subscriber’s age.

What are the Assets permitted for NPS funds Investment?

The sets of assets considered for investment of NPS funds are segregated based on their risk{return characteristics)
Asset Class E – Investments in predominantly equity market instruments. Maximum investment in this class is 50% of total contribution.
Asset Class C- investments in fixed income instruments other than Government securities.
Asset Class G – investments in Government securities.

What is Active choice?

Under this type of investment choice, the Subscriber has an option to choose a fund manager and provide the ratio in which his / her funds to be invested among the asset classes.

What is Auto choice?

NPS offers an easy option for those participants who do not have the required knowledge to manage their NPS investments. In case subscribers are unable/unwilling to exercise any choice as regards asset allocation, their funds will be invested in accordance with the Auto Choice option. Under this type of investment choice, the investments will be made in a life-cycle fund. Here, the fraction of funds invested across three asset classes will be determined by a pre-defined portfolio. At the lowest age of entry (18 years), the auto choice will entail investment of 50% of pension wealth in E Class, 30% in C Class and 20% in G Class. These ratios of investment will remain fixed for all contributions until the participant reaches the age of 36. From age 36 onwards, the weight in E and C asset class will decrease annually and the weight in G class will increase annually till it reaches 10% in E, 10% in C and 80% in G class at age 55.

What is rebalancing as per regulatory requirement appearing in Transaction Statement?

As mentioned in the offer document of PFRDA, in case of subscribers who have opted ‘Auto choice’ investment option, the percentage of investment in the asset classes E/C/G will change as per the age of the subscriber as given in the ‘Life cycle Investment Matrix’. The change happens on the date of birth of the subscriber. In this process, asset allocation ratio is changed and the existing assets are redeemed and reinvested as per the new ratio of allocation.

For Auto Choice, how do the proportion of E, C and G change?

In Auto Choice, the proportion of E, C and G is determined by the subscriber’s age. At each birthdate of the subscriber, these proportions are adjusted with age as mentioned in the life-cycle matrix.

How are the returns calculated in Tier I and Tier II account ? Is there a assured return / div / bonus?

The total contribution remitted in subscriber’s Tier I account and Tier II is passed on to the PFMs as selected by the subscriber at the time of registration (or changed subsequently). The PFMs invest the money in one or more asset class viz. Equity, Corporate Debt and Government Bonds in the ratio selected by the subscriber and declare Net Asset Value(NAV) at the end of each business day. Accordingly, based on the NAV, units are credited in the subscriber’s account. The present value of the investment is arrived by the units held multiplied by the NAV.

The return under NPS is market driven. Hence, there is no guaranteed/defined amount of return. The returns generated through investments are accumulated and is not distributed as dividend or bonus.

What is Net Asset Value (NAV)?

Also known as NAV, this is the price of one unit of a fund. NAV is calculated at the end of every working day between Monday and Friday. It is calculated by adding up the value of all the securities and cash in the fund’s portfolio (its assets), subtracting the fund’s liabilities, and dividing that number by the number of units that the fund has issued. The NAV increases (or decreases) when the value of the fund’s holdings increase (or decrease). NAV of different PFMs may differ. Even the different schemes under the same PFM will have different NAV

How can a Subscriber change his scheme preference?

The subscriber has to submit the physical application form (Form-UOS-S3/CS-S3) to change Scheme Preference. A subscriber under the Corporate model can exercise this option only if the option has been provided to the subscriber by the Corporate. But such changes can be done only once in a financial year. In case the Subscriber wants to change Scheme Preference for both the Tiers then the Subscriber should submit separate forms for each Tier. the subscriber can submit the request to his / her POP/POP-SP through whom the subscriber has opened the NPS account. Please collect a 17 digit acknowledgement number against your request.
In case of a Corporate (who has opted the Scheme Preference) can change the Scheme Preference for Tier I only by submitting a “CHO-2 Form (Application Form for Corporate Scheme Preference Change ) to CRA through the POP. Also if the Corporate desires to give the option of Scheme Preference to the subscribers / employees subsequently to opt for the PFMs, the same can also be done by submitting a “CHO-2 Form” (Application Form for Corporate Scheme Preference Change ). The CHO-2 Form can be downloaded from our website https://www.npscra.nsdl.co.in/organised-sector-forms.php. The transaction is chargeable.

How many times a subscriber / Corporate has an option to change his / her scheme preference?

A Subscriber / Corporate can request for a change of scheme preference once in a financial year for each of Tier I and Tier II account.

How does a subscriber track the status of the change request?

A subscriber can either check with his / her POP-SP or can call at CRA’s toll free number 1800 222 080 for the status of pending request. The 17 digit acknowledgement number received from POP-SP against subscriber’s request to be used.

Will I get any intimation for the change in scheme preference?

CRA system will send an E-Mail to the Subscriber’s registered E-Mail ID with the CRA system once the request is processed.

Is there any default Pension Fund Manager (PFM) Option provided under NPS?

Yes, there is a default PFM provision under NPS and SBI Pension Funds Private Limited acts as the default Pension Fund Manager.

 Grievance

How can a subscriber register a grievance/complaint ?

Subscriber can raise a grievance through Call Centre using T-PIN or through CRA website https://cra-nsdl.com/CRA/ using I-PIN. A subscriber can also contact his / her POP-SP, who can also raise a grievance on his/her behalf.

Subscriber can check the status of the grievance in CRA website. A subscriber can also forward a duly filled G1 Form to CRA for logging a grievance.

How will the grievance get resolved?

Whenever a subscriber raises a grievance, a system generated alert goes to the entity against which the grievance is raised. The respective entity then resolves the grievance and post resolution details in CRA system.

How will the subscriber know the status of the grievance lodged?

When a subscriber registers a grievance in the CRA website (https://cra-nsdl.com/CRA/), an unique token number is assigned to each and every grievance. Subscriber can use that token no. to know about the status of the grievances either through the call centre or through the CRA web-site.

Source https://npscra.nsdl.co.in/all-citizens-faq.php

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