2 Abbreviations used NPS New Pension System PFRDA Pension Fund Regulatory & Development AuthorityNSDLNational Security Depository LimitedCRACentral Recordkeeping AgencyCRA-FCCentral Recordkeeping Agency – Facilitation CentrePOPPoint Of PresencePOP-SPPoint Of Presence – Service ProviderPRANPermanent Retirement Account NumberPRNProvisional Receipt NumberPFMsPension Fund ManagersTBTrustee BankCAFComposite Application FormKYCKnow Your CustomerCGMSCentral Grievance Management SystemNPSCANNew Pension System Contribution Accounting Network
3 The New Pension SchemeThe Scheme is regulated by Pension Fund Regulatory & Development authority(PFRDA).PFRDA is an autonomous body set up by the Government of India to develop and regulate the pension market in India.NPS is available to all citizens of India with effect from 01 May 2009The scheme is operated by the National Securities & Depository Ltd (NSDL) through Central Recordkeeping Agency (CRA) & POPsPOPs (Point of Presence) provide service through POP-SPs(POP Service Provider)
4 Key stakeholders of NPS and their Functions CRA (Central Recordkeeping Agency)CRA being Administrator maintains Records, provides Service functions for NPS subscribersCRA issues unique Permanent Retirement Account Number (PRAN) to each subscriber, & maintains a database of all PRANs and records the transactions relating to each subscriber’s PRANCRA dispatches PRAN to registered NPS subscribers within 15 days from the date of submission of application at CRA-FC
5 Key stakeholders Contd.. CRA-FC (Central Recordkeeping Agency - Facilitation Centre)FC accepts covering letter along with the application & issues a receipt containing 17 digit Acknowledgment ID for each accepted application in the lot (15 digit PRN + 2digit running serial), which can be used for Tracking.In case of discrepancy in application, FC will reject the application & issue Rejection Memo with reasons for rejection to POP-SP by mailRejected application will not be returned.CRA-FC will communicate to POP-SP, only through registered IDs.
6 Key stakeholders Contd.. POP – Point of PresenceThe scheme is operated through organizations which are designated as Points of Presence (POP).PFRDA has appointed the Department of Posts (DoP) as one of the POPs.POP (DoP) operates through its Post Offices (at present HOs) termed as POP-SP (POP Service Provider).
7 Key stakeholders Contd.. Pension Fund Managers (PFMs)Six PFMs appointed by PFRDA would manage retirement savings under NPS.Trustee Bank:Bank Of India (BOI) has been appointed as Trustee Bank (TB), which will facilitate fund transfers across various entities of the NPS system viz PFMs
8 Features of NPSSubscriber will be allotted a Unique Permanent Retirement Account Number i.e PRAN.One individual is eligible for one PRAN only.
9 Types of NPS AccountsPRAN will provide access to Two personal Accounts,. Viz Tier I and Tier II.Tier IA Non-withdrawal account to which the Subscriber shall contribute his/her savings for building a retirement corpus. This is mandatory for NPS enrollment.Tier IIA voluntary savings facility which provides liquidity to subscribers, i.e subscribers will be free to withdraw their savings whenever they wish. This is an ad-on account.
10 Options Available to Subscriber Tier I.Tier I & II.Tier II activation for Tier I subscribersGovt servants appointed after 01 Jan are eligible only for Tier II activation (since they are already covered under NPS Tier I account).Govt servants appointed prior to 01 Jan & other citizens can opt for Tier I or both Tier.
11 IRA ComplianceGovt Servants appointed after 01 Jan are in two categories:IRA compliant – required documentation has been done & PRAN has been generatedNon IRA compliant – required documentation has not been done & PRAN has not been generated
12 Who can join NPS?Citizens of India (Resident or Non Resident)Age Limit(As on date of submission of application to POP-SP (PO)).One can enrol in the NPS at any time if he/she is a citizen of India and 18 years of age.No entry is allowed after 60 years of age.NRIs should have account with a bank in India to be eligible for joining NPSContributions made by NRI would be subject to regulatory requirements prescribed by RBI from time to timeComply with KYC norms
13 Who cannot join NPS? Insolvent person Individual of unsound mind Pre-existing account holders under NPS
14 How to enroll in NPS? Submit Registration Form - (Annexure UOS-S1) to the POP-SP (PO)Existing NPS Tier –I account holders have to activate only Tier – II using Tier II activation form (Annexure UOS-S10 or Annexure UOS – S11)
15 How much to contribute?... Min Initial contribution amount : Tier I = Rs Tier II = Rs.1000Min Subsequent contribution amount:Tier I = Rs. 500 Tier II = Rs. 250Min contribution per yearTier I : Rs Tier II = 2000Min number of contributions per year: 1(One)No maximum limit for contributionNo periodicity prescribed
16 How the contributions are invested Subscriber have to choose any ONE PFM among Six PFMs.NPS offers subscriber’s two approaches to invest in their account viz Active & Auto Choice.Active Choice : The subscriber has to indicate percentage(%) of allocation of contribution across three asset classes i.e.,E, (equity) – ‘High return, High risk’C (corporate bonds) – ‘Medium return, Medium risk ’G (Government Securities) – ‘Low return, Low risk ’
17 How the contributions are invested Contd…. Allocation to equity (E) must not exceed 50%Total of E, G & C must be 100E, G & C should be whole numbersAuto Choice:Percentage of allocation is not required to be mentioned.Tax BenefitsTax benefits would be applicable as per the Income Tax Act, 1961 as amended from time to time.
18 Getting money out At any point of time before 60 years of age: The subscriber required to invest at least 80% of the pension wealth to purchase a life annuity. Rest 20% may be withdrawn in a lump.On attaining the Age of 60 years and up to 70 years of age:Min 40% of the pension wealth should be used to purchase a life annuity. Remaining pension wealth can be withdrawn in a lump on attaining the age of 60 years or in a phased manner, between the age of 60 years and 70 years at the option of the subscriber.Death due to any cause:Nominee to receive 100% of the NPS pension wealth in lump sum
19 Charge structure (may change from time to time) CRA:PRA Opening Charges Rs. 50/-Annual Maintenance Charge per account Rs. 225/-Charge per Transaction Rs. 5/-POP: (to be collected upfront)Initial Subscriber Registration Rs. 100/- + ST/ECInitial/subsequent contribution upload :0.25% of the contribution amount subject to a minimum of Rs. 20 and a maximum of Rs. 25,000 plus applicable ST/ECService transaction not involving contributions :Rs. 20+ST/ECPFM Charges:Investment management fee: % p.a through cancellation of NAVNote: Service tax and other levies will be levied as per the existing tax lawsNo Maintenance charge for Tier – II Account
20 Grievance HandlingSubscriber have the option of registering grievance/complaint through the following channels:Call Centre/Interactive Voice Response System (IVRS) – Toll Free NumberWeb based interface: Subscriber can log to website using I-pin.Physical Form: The subscriber can submit the grievance in a prescribed format to POP-SP; which will be forwarded to Central Grievance Management System (CGMS).
21 Swalamban YojnaUnder Swavalamban scheme GOI will contribute Rs per year (for a period of Three years) to every National Pension System (NPS) account opened subject to conditions.Subscriber is not covered under employer assisted retirement benefit scheme and also not covered by social security schemes.PRAN should be opened in the year orMin contribution should be Rs and Max Rs PA (FY), for both Tier I and Tier II taken together, provided subscriber makes minimum contribution of Rs.1000 per annum to his Tier 1 account.For detailed eligibility criterion, reference may be made to the guidelines of MoF.
23 Nodal OfficeDoP has established a Nodal Office that has been registered with the CRA as POP. The Nodal Office is functioning from CEPT, Mysore.The Nodal Office will register the POP-SPs (POs) with CRA & communicates the Registration Numbers to the POs concerned.The nodal office will update the PRAN details and upload the MIS and SCF to CRA, and transfer the consolidated fund to CRA through Trustee Bank.Nodal office will also process the service request of the subscriber such as Tier II activation, Withdrawal request etc,.
24 Registration of POs as POP-SP The post offices identified for carrying out NPS transactions are called POP-SPs (Point of Presence _ Service Providers).POP-SPs have to be registered with the CRA (Central Record keeping Agency) – one time job through NPS Nodal Office.POP-SP registration number should be configured in Point Of Sale Module.
25 Types of Transactions Handled by POP-SP Subscriber Registration (‘Opening of Account’)Initial Subscriber Contribution (‘First Deposit’)Subsequent Subscriber Contributions (‘Subsequent Deposits’)Handling Service Requests (Including withdrawal requests)Grievance handling
26 How the transactions are carried out at POP-SP? All transactions are carried out through ePayment.A National level Biller called ‘NPS Trust’ has been created. This biller is operated by the Nodal Office and Mysore HO (Biller HO).Counter PA to select ePayment->NPS Trust and choose required service type in Point Of Sale module and generate receipt.ePayment communication must be run in order to make available the transaction in ePayment central server.
27 Duties of POP-SP Steps involved in Subscriber Registration at POP-SP. Submission of form by subscriber at POP-SP (Annexure UOS – S1).Scrutiny of form & documents, acceptance & generation of receipt for Registration (Receipt Number starts with ‘11’).It should be ensured that:All the Mandatory columns of the Application are filled.The application filled in Block/Capital letter using Black Ink.One PFM is selected.Percentage of allocation is provided in case Active Choice.The application is signed by the subscriber.
28 Duties of POP-SP Contd.. In case of Tier II Tier II details are filled, One PFM is selected and percentage of allocation is provided if opted for Active Choice.The subscriber should provide a cancelled cheque & copy of PRAN card along with application.Acceptance of NCIS for Initial and Subsequent contribution & generation of receipt (the Receipt Number starts with ‘12’).Subsequent contribution should be accepted only after generation of PRAN and subscriber should be asked to produce the PRAN or copy of PRAN card.
29 Duties of POP-SP Contd..The Transaction Data should be communicated to ePayment Server by running ePayment communication without fail.Segregation of documents(CRAFC/Office Copy)Composite Application Form (Annexure UOS –S1), One set of KYC document and NCIS (Initial Contribution) to be sent to CRA-FC.One set of KYC must be retained in the POP-SP with relevant entry in the register kept for the purpose.Consolidation of Forms (CAF) along with documents at the end of the day & submission to Facilitation Centre with covering letter.
30 Duties of POP-SP Contd..Covering letter to contain POP & POP-SP registration number with total number of applications attached in lots of max 50 per lot. Running serial to be maintained for covering letters.POP-SP should collect Acknowledgement ID for accepted applications or Rejection memo if the applications are rejected.It is the responsibility of POP-SP to communicate the subscriber about rejection & get new form filled up and re-submit to CRA_FC. On submission of application Ack ID should be collected.Registration receipt number to be used in PRAN field of Point of Sale for New registration transaction (since PRAN is yet to be issued).
31 Duties of POP-SP Contd.. Service requests Post office (POP-SP) shall facilitate:Registration ofBoth Tier I and Tier II accountTier I Account onlyService requestsTier II activation (for Tier – I holder)Subscriber Modification (Form Annexure UOS-S2)Reissue of I-PIN, T-PIN (Form Annexure UOS-S2)Swavalamban Declaration (Form SW-1)Withdrawal request (Form Annexure UOS-S12)Re issue of PRAN card (Form Annexure UOS-S2)Shift POP (Form Annexure UOS-S6)Shift POP-SP (Form Annexure UOS-S5)Scheme Preference Change (Form Annexure UOS-S3)Photo/Signature modification (Form Annexure UOS-S7)etc.,
32 Forms used for various types of transactions … Subscriber applying fresh Tier-I and Tier-II account:Composite Application Form (CAF) Annexure UOS-S1Tier II Activation:Subscriber who has been registered for Tier-I and issued a PRAN card: Form Annexure UOS-S10 to be used.Subscriber who has been registered for Tier-I and not issued a PRAN card: Form Annexure UOS-S11 to be used.Annexure NCIS – for contributions (Tier I & II).Annexure S1 (Application for Allotment of PRAN) – with Annexure UOS - S11 only.If PRAN is required in Hindi, the form Annexure UOS- SH1should be used.All the forms and covering letter are made available for download at
33 Forms used for various types of transactions Contd.. Subscriber Modification, Reissue of I-PIN, T-PIN , Re issue of PRAN card (Form Annexure UOS-S2)Swavalamban Declaration (Form SW-1)Withdrawal request (Form Annexure UOS-S12)Shift POP (Form Annexure UOS-S6)Shift POP-SP (Form Annexure UOS-S5)Scheme Preference Change (Form Annexure UOS-S3)Photo/Signature modification(Form Annexure UOS-S7) etc.,
34 General ChecksForm presented is the one prescribed for the type of account.A colour photograph of size 3.5 X 2.5 cm.The signature should be inside the rectangle provided in the form.Date of birth to be validated by valid documentary proof.KYC documents (proof of identity & proof of address) to be checked.
35 Verification of forms … Annexure UOS-S1 application should not be accepted from an applicant who already holds NPS membership (Tier – I).If the applicant is applying for Tier-II activation, copy of PRAN card should be collected.The Supervisor shall verify that the Subscriber name and address provided in application form is as per the KYC documents.Bank details are mandatory for Tier-II account and optional for Tier –I account.
36 Verification of forms Contd.. Supervisor to collect a cancelled cheque from the subscriber in case of Tier – II activation.Nomination:The percentage of distribution among nominees shall be integer number.Investment option should be provided (if both investment option and asset allocation fields are left blank, the application will be treated as “Auto Choice”)The applicant to provide two copies of KYC documents. One set will be retained by the PO, and the other will be sent to designated FC.
37 Tier II ActivationTier II Activation will be done by Nodal Office (CEPT, Mysore)Annexure UOS-S10 or S11, cancelled cheque and copy of PRAN card must be sent to nodal office for Tier II activation by or by Fax.When Tier-II is activated, the PO shall forward such application forms along with supporting documents periodically to FC (within 15 days).The status regarding IRA compliance needs to be checked while accepting application for Tier II activation.Tier II Activation
38 Initial contribution processing at the time of registration NPS Contribution Instruction Slip (NCIS) should accompany the application form.The following points should also be ensured:If the subscriber is a pre- Ist January 2004 Govt. Employee or other than govt employee, he/ she can contribute for both, Tier-I and Tier-II.If the subscriber is a govt. employee who has joined on or after 1st Jan, 2004, they are mandatorily covered under NPS and he/ she can contribute for Tier-II only.In case fresh application for Tier-I or for Both Tier, the subscriber to select New applicant checkbox in NCIS form.
39 Initial contribution processing contd.. Contribution may be through cash, cheque or Draft.The Cheque or Draft should be crossed in favour of Postmaster concerned.If the contribution is through cheque, transaction will be done after realization of cheque.
40 contd.. Counter PA to fill following details in NCIS: PoP_SP Registration NumberPRAN & Name of the Subscriber, Date/TimeReceipt Number (contribution)Illustration:Amount received for Tier I (1)Amount received for Tier II (2) 1000PoP Registration Charges (3)PoP Transaction Charges (4)Service Tax(as applicable) (5)Amount Invested [(1+2)-(3+4+5)] ( )= 1341
41 Receipts The receipt will be of 17 digits Receipt in duplicate : First 2 digits indicates service type.Next 7 digits indicates POP-SP regn. Number.Next 8 digits indicates transaction number.Receipt in duplicate :One to the customer.Other pasted to the NCIS form .
42 Subsequent Subscriber Contribution… PRAN shall be mandatory for all subsequent transactions.PO to accept NCIS from subscriber only after confirming following details :Subscriber PRAN w.r.t PRAN card,Name (As appearing in PRAN),Amount of contribution (Tier – I & Tier – II),Counter PA shall fill in details in NCIS, amount to be invested after deducting PO commission + service tax, handover the subscriber portion and retain the POP-SP portion at PO custody.Day’s transactions should be uploaded to ePayment Central Server without fail.
43 Subscriber servicing… The following changes are allowed Changes allowedNameAddressPhone/mobile no./ IDDocuments requiredSupporting documents + PRAN card copyNo document required
44 …Subscriber servicing Subscriber bank detailsPreference for value added services, like alerts, SMS alertsChange in nomination detailsEmployment categorySupporting documents +copy of PRAN card if IRA compliant, in case of Tier-II, copy of a cancelled chequeNo document requiredCopy of PRAN card
45 Grievance handlingReceiving of grievances against any POP-SP or any other NPS intermediary in the format prescribed and to forward them to CRAPOP-SP can also log the grievances in Central Grievance Management System(CGMS) using I-PINThe grievance shall be resolved within 7 days
46 Processing of Transaction at NPS Nodal Office NPS Nodal Office will segregate/process all transaction as followsValid Transactions:-Details will be sent to Mysore HO (Biller HO) for effecting Payment to CRATransaction pending for further validation: -Tier-2 contributions accepted by POP-SP against inactive Tier – II A/c – Nodal Office will make efforts to obtain required forms and update the CRA System. If the efforts proved futile, after 10 working days Nodal Office will mark them for refund.Invalid Transactions –SR PM Mysore HO issue refund by service eMO to the subscriber C/o PM of the POP-SP.
47 If PRAN is denied by CRAIn respect of Initial Contribution for which PRAN is denied by CRACRA-FC sends a rejection memo to the POP-SP (But information regarding rejection will not be available with NPS Nodal office or Biller HO).Refund can be initiated if subscriber submits written request to POP-SP with copy of POS receipt.POP-SP checks the genuineness with reference to rejection Memo and also checks whether PRAN is generated against the receipt number or not and forward the copy of requisition letter to their Divisional Head for Authentication. The original request application should be preserved in POP-SP along with other documents.
48 If PRAN is denied by CRA Contd.. The Divisional Head shall forward the copy of the Request letter to NPS Nodal Office in prescribed proforma with Recommendation/ Authentication for refund.On receipt of service eMO from Mysore HO, POP-SP shall collect the ORIGINAL PoS Receipt or a Declaration in lieu of receipt from subscriber and preserve with request letter and then effect payment
49 Refund ProcessThe transactions marked by NPS Nodal Office for refund will appear automatically at Mysore HO (Biller HO).The Sr. PM Mysore HO will book eMO in the Name of Subscriber c/o PM of the POP-SP concerned through automated process.The eMO will contain all information in its communication portion.For this purpose One bulk eMO remitter by name “SRPM MYSORE HO (NPS REFUND)” is created.The particulars will be made available in MIS.