national

pension
system

Retired
life
ka sahara,
NPS
hamara
 SECURE YOUR GOLDEN
YEARS WITH NATIONAL
PENSION SYSTEM
The National Pension System (NPS), launched by
the Government of India for its citizens to bring an
attractive long term savings avenue to effectively
plan for your retirement through safe and
reasonable market-based returns. NPS is
regulated by the Pension Fund Regulatory and
Development Authority (PFRDA). PFRDA has
appointed NSDL e-Governance Infrastructure Ltd.
as the Central Recordkeeping Agency (CRA) for
NPS.

HOW DOES NPS WORK?

Open An Account

For Individual Subscriber:

In many ways, opening an NPS account is similar to opening of any investment account,
but it's a lot simpler. PFRDA has appointed various banking and non-banking financial
institutions as 'Point of Presence' (POP) for assisting you to enrol for NPS. You can visit the
registered branches or outlets of these POPs called POP-Service Providers (POP-SP)
where you can collect, fill in and submit your Common Subscriber Registration Form
(CSRF 1). There are two different types of account possible under NPS - Tier I (pension
account) and Tier II (investment account). Tier I account under NPS is your pension
account where you contribute to build your retirement corpus. Withdrawal options are
limited in Tier I account. Tier II is an add-on account, which is simply a voluntary savings /
investment facility. You are free to withdraw your savings from this account whenever you
wish without any 'exit load'.

(The list of the POP is available on our website www.npscra.nsdl.co.in

& the PFRDA Website www.pfrda.org.in)

2 NATIONAL PENSION SYSTEM (NPS)

The CSRF 1, which contains information such as your personal details,
nomination details, investment preferences etc., can also be downloaded
from our website (www.npscra.nsdl.co.in). Fill the form and submit it to
the POP-SP of your choice. Do not forget to mention your mobile number
and email ID while filling up the form. CRA sends sms and email alerts for
various transactions as well as quarterly account balance to all the
subscribers for free. While submitting the form to the POP-SP, please
ensure that you have the '17 digit receipt number' from the POP-SP for
tracking your enrolment status online. There are POPs which also offer
online registration for its clients. You may visit POPs website to learn
more.

Once your account is opened, you will receive a "Welcome Kit"

containing a Permanent Retirement Account Number (PRAN) Card and
other related documents. This PRAN is unique and portable - it remains
unchanged as long as you are associated with NPS even if you change
your location or job.

NPS gives you a 24X7 access to your account and transaction

details. Making the most of technology, you can access
your account using a toll free helpline number,
through a Telephone Password (TPIN) and
via our website using your Internet
Password (IPIN).

For Corporate Sector:

NPS Corporate Sector Model,
launched in December 2011, was
customized to suit the needs of various
organisations and their employees
within the purview of their employer-
employee relationship. NPS is an
additional option for offering retirement
benefit to the employees but it does
not dilute any statutory provisions.
Corporates may join NPS through any
one of the existing POPs. The eligibility
criteria for Corporates to join NPS are
available on www.npscra.nsdl.co.in.

3
 ACTIVATION OF TIER II
a. At the time of Initial Registration
You can submit Common Subscriber Registration Form (CSRF 1) to open both Tier I as
well as Tier II account at the same time. Along with the form, you need to submit a copy of
PAN card, bank account details and cancelled cheque supporting the bank details for
activating Tier II account.

b. Existing NPS subscriber with active Tier I account

As an NPS Subscriber with an active Tier I account, you can activate your Tier II account
by submitting the UOS-S10 form along with copy of PRAN card, PAN Card, bank account
details and cancelled cheque supporting the bank details to your associate POP-SP. If you
are a subscriber under Government Sector, you may submit the form to your Nodal Office
(PAO / DTO) or any of the POP-SP of your choice.

All the details for Tier II account (scheme preference, nomination etc.) are independent of
Tier I account. For example, you may choose PFM "X" for Tier I and PFM "Y" for Tier II. You
may also exercise Active and Auto Choice independently for Tier I and Tier II account.

Choose an Investment Option

NPS allows you to choose from any one of the Pension Fund Managers (PFMs) appointed
by the PFRDA to manage your pension fund, list of PFMs is available in our website.
Further, NPS also offers you two approaches to invest in your account- Active
Choice and Auto Choice.

ACTIVE CHOICE:
Unlike traditional rigid investment products, NPS offers you
with the flexibility to design your own portfolio.
Depending on your risk appetite, you can design your
portfolio by allocating your funds among the following
three asset classes:
Equity or E - A 'high return-high risk' fund that
invests predominantly in equity
Corporate Debt or C - A 'medium return-medium
risk' fund that invests predominantly in fixed
income bearing instruments
Government Securities or G - A 'low return-low
risk' fund that invests purely in Government
Securities.
If you are a conservative investor, you can choose to invest
your entire pension wealth in C or G asset class. However, if you
want to have exposure to equity, you can allocate upto 50% of your
asset to asset class 'E'.

4 NATIONAL PENSION SYSTEM (NPS)

AUTO CHOICE (LIFE CYCLE FUND):
Designing your portfolio can be a little delicate and time consuming. NPS gives you the
flexibility to opt for a dynamic allocation of your portfolio in case you do not want to
exercise an Active Choice. This option is called the Auto Choice, wherein your money will
be invested in all three asset classes - E, C and G - in defined proportions based on your
age. When you are younger, a larger share will be in the higher risk-higher return option;
and as you approach retirement, the proportion in the lower risk- lower return option
increases. The asset allocation table for Life-Cycle Fund is given below;

Asset Asset Asset

Age Class E Class C Class G
Up to 35 years 50% 30% 20%
36 years 48% 29% 23%
37 years 46% 28% 26%
38 years 44% 27% 29%
39 years 42% 26% 32%
40 years 40% 25% 35%
41 years 38% 24% 38%
42 years 36% 23% 41% e
C hoic
43 years 34% 22% 44% Auto
44 years 32% 21% 47%
45 years 30% 20% 50%
46 years 28% 19% 53%
47 years 26% 18% 56%
48 years 24% 17% 59%
49 years 22% 16% 62%
50 years 20% 15% 65%
51 years 18% 14% 68%
52 years 16% 13% 71%
53 years 14% 12% 74%
54 years 12% 11% 77%
55 years and above 10% 10% 80%

You can exercise any of the investment choice as per your wish. You can also
switch from one option (PFMs, asset allocation & Investment approach) to
another, once in a financial year. Investment options in Tier I and Tier II are
completely independent of each other.
Under Corporate Sector, a Corporate would have the flexibility to decide PFM
and investment option on behalf of the employees.

5
 Deposit your money
Tier-I (pension account): Start investing in Tier I account with at least
Rs. 500. Minimum contribution in Tier I account is Rs. 6,000 per
financial year. Over and above this mandated limit, you can
contribute any amount at any frequency as per your
convenience through any POP.

Tier-II (investment account): During the opening /

activation of Tier II account, you need to pay the
initial contribution of only Rs. 1000. Tier II gives you
the flexibility to invest anytime through any POP. It also
offers you liquidity by allowing you to withdraw your
entire investment at any given point of time1.

Corporate Sector
NPS provides a platform for Corporates to
co-contribute for its subscribers or facilitate them to
contribute for their pension. There are three variations
of contributions from employer and employee:
Equal contributions by the employer and the employee
Unequal contribution by the employer and the employee
Contribution from either the employer or the employee
A Corporate subscriber can also voluntarily contribute in their Tier I and Tier II account
through a POP.

Tax Benefit
Under NPS, tax deduction can be claimed up to 10% of
salary (Basic + DA) subject to overall ceiling of Rs. 1.50 lakh
u/s 80 CCE of Income Tax Act. 1961.

Exclusive Tax Benefit for any NPS subscribers u/s

80CCD(1B)
An additional deduction for the investment up to Rs. 50,000
in NPS (Tier I account) has been introduced under sub-
section 80CCD(1B). This is over and above the deduction of
Rs. 1.5 lakh available under sec 80CCE. This is an exclusive
tax deduction available only for investment in NPS and not
available for any other investments. If you are an existing
Government subscriber, you can approach any POP-SP or
your Nodal Office for making additional contribution in your
Tier I account.
Tax Benefits are applicable for investments in
Tier I account only
1
Please refer to the section Maintaining your NPS Account.

6 NATIONAL PENSION SYSTEM (NPS)

Tax Benefit to Subscribers under Corporate Sector
Under 80CCD(2) of Income Tax Act, the employer's NPS contribution (towards the
employee) upto 10% of salary (Basic + DA), without any monetary limit is also deductible
from taxable income in addition to mentioned earlier benefits.

Monitor your investments

You can track the Net Asset Value (NAV) of all funds under NPS which is updated on a daily
basis in our website (www.npscra.nsdl.co.in). Returns delivered by all the funds under
NPS and 'Pension Calculator' are also available in website of NPS Trust
(www.npstrust.org.in) for assisting you to monitor your investment under NPS and take
informed decision.

IPIN / TPIN
You can access your account details online through the IPIN,
which is a password to access your account on CRA
website (www.cra-nsdl.com). The IPIN can be reset
online using 'One Time Password' (OTP),
which will be forwarded to your
registered mobile number. In addition,
CRA provides a TPIN, which can be
used to access your account
through the toll free helpline number
(1-800-222080). The bilingual
'Interactive Voice Response' (IVR)
service helps you to access your
account details and request for
Transaction Statement to your
registered email ID. You can also
speak to Customer Care Executives
for any specific query and to reset the
TPIN.

Transaction Statement
You can access your Transaction Statement
in following ways
Login to CRA system using IPIN and generate a
statement
Call Helpline Number and request a statement through IVR
using TPIN
Visit associated POP-SP or Nodal Office and request a Statement
In addition to this, CRA sends a physical statement once a year to your correspondence
address registered with CRA.
7
 Maintaining your NPS Account

a. Portability:
One of the core attribute of NPS is portability of PRAN across sectors and geographies.
This implies that you can shift your PRAN from one sector to another, e.g. Central
Government to Corporate sector, State Government to Central Government etc. To shift
your PRAN from one sector to another, you need to submit a duly filled ISS-1 form to target
Nodal Office / POP-SP. Once the request is processed, your new Nodal Office / POP-SP
can start to process the contribution in your PRAN. If the Scheme Preference in the source
and target sectors are different, the accumulated units under the old scheme will be
redeemed and reinvested as per the scheme preference under the targeted sector.
However, your PRAN remains unchanged.

b. Change of Service Provider:

If you are relocating, you can change the POP-SP within the same POP by submitting the
form UoS - S5 to the POP-SP you are currently associated with or to the new POP-SP with
whom you want to get associated. You can also change the POP by submitting the form
UoS S6 to the POP-SP of the POP of your choice. However, there cannot be two different
POP-SPs for Tier I and Tier II.

c. Online Updation of Subscriber's Contact Details:

You can update / modify your contact details (E-mail ID, Mobile Number and Telephone
Number) online after login to CRA system using IPIN.

d. Change of Details:
You can request for change in personal details, bank details, reissue of PRAN Card to the
associated POP-SP / Nodal office.

e. Minimum Investment Criteria (Freezing / Unfreezing):

Your account will be frozen if the following conditions are not met:
Tier I - Contribute a minimum amount of Rs. 6,000 in a Financial Year (FY) in Tier I
account.
Tier II - The account balance (value of holdings) at the end of the FY is greater than or
equal to Rs 2,000 and / or at least one contribution is made in a FY.

To unfreeze an account, you need to submit duly filled physical request (Annexure-
UOSS10A) to the associated POP / POP-SP along with the minimum amount of Rs. 600.
Rs. 100 will be charged as "Penalty for unfreezing" and the rest will be invested in your
account.

8 NATIONAL PENSION SYSTEM (NPS)

 Taking Your Money Out:
Getting your Pension:
Situation Guidelines

You will have to use at least 40% of your accumulated pension

When you want fund to purchase an annuity that would provide you a regular
to exit NPS monthly pension. The remaining funds can be withdrawn as
at the age of lump sum.
60 years

When you want You will have to use at least 80% of your accumulated pension
to exit NPS fund towards purchase of an annuity for a regular monthly
before the age pension The remaining funds can be withdrawn as a
of 60 years1 lump sum1.

You may also contribute beyond the age of 60 years

Both Annuity and Lump sum Withdrawal can be deferred.

Partial Withdrawal:
Partial withdrawal will be allowed in your account
subject to fulfillment of the following:-
- You should be in NPS for at least 10 years
- Amount to be withdrawn should not
exceed 25% of the contributions made by
you
- The withdrawal can happen only against
specified reasons
- Withdrawal will be allowed maximum
three times during the entire tenure of
subscription with a gap of at least five
years between two partial withdrawals

Upon death of Subscriber

For subscribers under Government Subscriber, the
claimant will start getting pension based on the
accumulated pension wealth.
For subscribers under Non-Government sector, claimant has an
additional option of 100% withdrawal.

1
You will be allowed to withdraw before the age of 60 if you have stayed in NPS for at least 10 years.

9
 Cost

Intermediary Charge head Charges

Method of Deduction
(excluding Tax)

One time Account

Opening charges Rs. 40
Redemption of
CRA Annual Maintenance Charge Rs. 95 units on a quarterly
Transaction (Contribution, basis
change in scheme preference, Rs. 3.75
switchand withdrawal)

Initial subscriber
Rs. 125
registration
POP
(Maximum
Permissible Initial and 0.25% of To be collected
Charge for subsequent contribution subject upfront
each contribution to min of Rs. 20
subscriber)
Any subsequent
transactions (other Rs 20
than contribution)

*Service tax and other levies, as applicable, will be levied as per the existing tax laws.
The charges associated with NPS Trust & management of funds are adjusted to the NAV.

Grievance Redressal
NPS has a multi layered Grievance Redressal Mechanism which is easily accessible,
simple, quick, responsive and effective. You have the option of registering complaint
through the following alternatives:

CRA Helpline
You can contact the CRA helpline at the toll free number (1-800-222080) and register a
grievance. On successful registration of your grievance, a token number will be allotted by
the Customer Care Executive for any future reference.
After the grievance is raised, an alert is sent to the concerned entity. Once resolution is
provided by the entity, an email alert is sent to your registered email ID. You can also check
the status of the grievance at the CRA website (www.cra-nsdl.com) or through the CRA
helpline by mentioning the token number provided after successful grievance registration.

Web based interface

You can register the grievance against any interfacing entity by login to CRA website with
your IPIN. On successful registration of the grievance, an unique token number will be
displayed on the screen, which can be used for future reference. In case you are not
satisfied with the resolution, the same may be escalated to NPS Trust online.

10 NATIONAL PENSION SYSTEM (NPS)

 Benefits of NPS

Strong Simple
Regulation

Portable NPS Flexible

Transparent
Cost Tax
Structure Savings

Retired life ka sahara,

NPS hamara

11
NSDL e-Governance Infrastructure Limited
1st Floor, Times Tower, Kamala Mills Compound,
Senapati Bapat Marg, Lower Parel,
Mumbai - 400013, India
Tel: 91-22-4090 4242 Email: [email protected]
Website: www.npscra.nsdl.co.in / www.egov-nsdl.co.in
facebook.com/nps.NSDL