Your monthly contributions, and the matching contributions by the Government into your Tier-I account, will be transferred by the Government in your name to a Pension Fund Manager (PFM). The PFM will invest your contributions on your behalf. In this way, your savings will earn an interest and grow over time.
Yes. As your employer, the Government will match your contribution (10% of basic+DA+DP) and transfer this amount also to your Tier-I account in your name.
You are covered by the NPS if
1. You joined central government service(except armed forces) on or after 01 January 2004, and
2. You are an employee of a Central (Civil) Ministry or Departments, or
3. You are an employee of a non-civil Ministry or Department including Railways, Posts, Telecommunication or Armed Forces (Civil), or
4. You are an employee of an Autonomous Body, Grant-in-Aid Institution, Union Territory or any other undertaking whose employees are eligible to a
pension from the Consolidated Fund of India.
Currently, only a Tier-1 (non-withdraw able) scheme has been launched under the New Pension System. Under this scheme, the subscriber cannot withdraw the amount before age 60.
Your contributions will not earn any specified rate of return. The PFM will invest your savings in a scheme of your choice. The returns earned by the PFM on the scheme selected by you will be credited to your account. For detailed scheme details please refer to the offer document available on http://pfrda.org.in/.
The NPS was introduced with effect from 01 January 2004 vide Notification 5/7/2003-ECB&PR issued on 22 December 2003 by the ECB&PR Division of the Department of Economic Affairs, Ministry of Finance, Government of India.
You are not covered by the NPS if
1. You are already covered by the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and any other special Acts governing these funds,
or
2. You joined Central Government service before 01 January 2004, or
3. You are an employee of the Indian Armed Forces (Army, Navy and Air Force), or
4. You are employed in a Department or in a Post under which you are not eligible to receive a pension from the Consolidated Fund of India.
You will specify the PFM and scheme to your DDO. The DDO will arrange for transfer of your contributions to the PFM(s) and scheme(s) that you have selected.
No. The 10% contribution by the Government will stop when you leave Government service. However, your savings in your Tier-I and Tier-II accounts will stay in your name and you will be able to continue using these accounts to save for your retirement.
New Pension System is India’s simplest and perhaps the least cost pension system.
New Pension System (NPS) has been introduced by the Central Government on 01 January 2004, and is being regulated by Pension Fund Regulatory and Development Authority (PFRDA).
With effect from 1st May 2009 New Pension System has been extended to all citizens of India on a voluntary basis. NRIs can also apply.
Key features of NPS :
- Unique & Portable Permanent Retirement Account Number (PRAN)
- Pension system is envisaged to be based on two types of sub-accounts created for individual subscribers :
- Tier-I non-withdrawable pension account, and
- Tier-II withdrawable savings account.(Note : Currently only Tier-I non-withdrawable pension account has been started by PFRDA.)
- Multiple funds and scheme options.
- Annuity at retirement
ICICI Bank has been appointed as one of the Point of Presence (PoP(s)) for registering applicants to the NPS. Designated branches of ICICI Bank have been registered as Service Providers (POP-SP(s)).
On registration to the NPS, the subscriber will be issued a Permanent Retirement Account Number (PRAN) . After receiving the PRAN, customers can deposit monies in their PRAN on a regular basis.
- He/She should be a resident Indian.
- The subscriber should be between 18 and 55 years on the date of application.
- He/she has to provide the KYC documents (Identity AND Address proof as per PFRDA guidelines) for registering to NPS.
- Subscriber can choose any one Pension Fund Manager (PFM) of the 6 registered (PFM) for managing his deposits.
- The subscriber can either let the PFM decide in which asset classes to deposit his investments (AUTO CHOICE)
OR
He/She can indicate his investment choices (ACTIVE CHOICE) in the 3 asset classes in percentage
- EQUITY (maximum 50 percent in Equities is allowed)
- CORPORATE BONDS
- GOVERNMENT BONDS
Initial minimum contribution amount along with the Subscription application is Rs.500/- in cash or cheque. If the same is in cheque, it should be drawn in
- favour of "ICICI BANK Collection a/c- NPS trust"
- Minimum amount to be deposited in the PRAN annually is Rs.6000/-.
- Subscriber has to make a minimum of 4 transactions (contribution deposits) in the account each year.
- An amount of Rs.40 plus service tax applicable (10.30% currently) will be deducted from the initial contribution towards processing fees.
- Rs.20 plus service tax applicable will be deducted from subsequent contributions deposited by the subscriber.
Currently, only a Tier-1 (non-withdraw able) scheme has been launched under the New Pension System. Under this scheme, the subscriber cannot withdraw the amount before retirement.
You will be able to withdraw your savings in your Tier-I account at age 60.
During this (interim) period, the Controller General of Accounts (CGA) and the Central Pensions Accounting Office (CPAO) are working together. They will issue your PPAN number, deduct your monthly contributions towards your Tier-I pension account and transfer this along with the Government's matching contribution to a separate head under the Public Account.
No. You will not be eligible to Gratuity
No. The contribution of the Government will be limited to 10% of your basic+DA+DP.
No. The NPS is mandatory for you.
The PPAN number will stay the same and you will be able to use the same accounts from anywhere in the world.
You will select a PFM to manage your contributions and savings.
No. The government will not make any contribution to your Tier-II account.
No.
No. The General Provident Fund (Central Service) Rules, 1960 also do not apply to you. You will not be permitted to contribute towards GPF.
Your contributions (and the matching contribution by the Government) towards your Tier-I pension account will begin only from the month following the month in which you join Government service. During the first month of your service, you will be allotted the PPAN.
No. The PFRDA, CRA and PFMs will be appointed in the next few months.
No. You will be allowed to operate (and contribute to) your Tier-II account only when the PFRDA, CRA and PFMs are appointed.
Your full contributions, matching contributions by the Government, and the interest earned on the same will be transferred in your name to the PFM and scheme selected by you.
You will be required to use 80% of your savings in your Tier-I account to purchase the annuity. You will be able to withdraw the balance 20% of your savings as a lumpsum.
Each PFM will offer you a limited number of simple, standard schemes. You will be free to choose any of the following schemes for investing your savings:
1.Scheme A This scheme will invest mainly in Government bonds
2.Scheme B This scheme will invest mainly in corporate bonds and partly in equity and government bonds
3. Scheme C This scheme will invest mainly in equity and partly in government bonds and corporate bonds
The PFRDA will appoint a limited number of leading professional firms to act as PFMs. One of these PFMs will be a public sector agency.
No. The Central Civil Service Pension Rules (1972) do not apply to you. You are covered only by the New Pension System Rules framed for the NPS.
Yes. You will be permitted to contribute more than the mandated 10% of Basic+DA+DP into your Tier-I account – subject to any ceiling that may be decided by the Government.
Yes. You will have an option of selecting an annuity which will pay a survivor pension to your spouse.
When you join Government service, you will be allotted a unique Personal Pension Account Number (PPAN). This unique account number will remain the same for the rest of your life. You will be able to use this account and this unique PPAN from any location and also if you change your job. The PPAN will provide you with two personal accounts:
1. A mandatory Tier-I pension account, and
2. A voluntary Tier-II savings account.
The Government is setting up a new dedicated regulatory authority. This will be named the Pension Fund Regulatory and Development Authority (PFRDA). The PFRDA will be responsible for the NPS and for protecting your interests in the NPS.
You will have to pay a fee to the Central Recordkeeping Agency (CRA) which will maintain your accounts and also to the PFM(s) which manage your savings. These charges will be deducted from your savings on a periodic basis. The fees and charges by the CRA and PFMs will be regulated by the PFRDA
The Government is yet to issue any guidelines on this.
Your contributions will not earn any specified rate of return. The PFM will invest your savings in a scheme of your choice. The returns earned by the PFM on the scheme selected by you will be credited to your account.
No. Once your savings are transferred to the PFM, your savings will enjoy only the rate of return earned by the PFM on scheme you have selected.
When you join service, your Drawing and Disbursement Officer (DDO) will instruct you to fill out a NPS form. You will be required to provide your full professional and personal details including details of your nominee in this form. The DDO will issue you the PPAN number and will also be responsible for all administrative matters related to your NPS accounts including deduction of your contributions, transferring your contributions and the matching contribution of the Government to your Tier-I pension account.
Yes. You will be free to spread your savings across these three schemes. Whenever you decide, you will also be free to switch your savings from one scheme to another.
- Tier-I account: You will have to contribute 10% of your basic+DA+DP into your Tier-I (pension) account on a mandatory basis every month. You will not be allowed to withdraw your savings from this account till you retire at age 60. Your monthly contributions and your savings in this account, subject to a ceiling to be decided by the government, will be exempt from income tax. These savings will only be taxed when you withdraw them at retirement.
- Tier-II account: This is simply a voluntary savings facility for you. Your contributions and savings in this account will not enjoy any tax advantages. But you will be free to withdraw your savings from this account whenever you wish.
You will be able to withdraw 60% of your savings as a lumpsum when you retire. You will be required to use the balance 40% of your savings to purchase an annuity scheme from a life insurance company of your choice. The life insurance company will pay you a monthly pension for the rest of your life.
Every month, the government will deduct 10% of your salary (basic+DA+DP) and automatically transfer this amount to your Tier-I account in your name.
Yes. Your contributions and the Government's matching contribution in your name will earn the same interest as GPF (8% per annum).
No. You will be allowed to do so only when the PFRDA, CRA and PFMs are appointed
- Initial minimum contribution amount along with the Subscription application is Rs.500/-. Max deposit in cash is Rs. 25000 per transaction for ICICI bank.
- . Minimum amount to be deposited in the PRAN annually is Rs.6000/-. .
- Subscriber has to make a minimum of 4 transactions (contribution deposits) in the account each year.
Yes. If you wish, you will be able to spread your savings across multiple PFMs – where a part of your savings are managed by 2 or more PFMs.
The NPS is a new Defined Contributory Pension Scheme introduced by the Central Government for new recruits to the Central Government service (except Army, Navy and Air Force) joining on or after 1.1.2004. Under the New Pension System, each such central government employee will open a personal retirement account on joining service. Every month, and till the employee retires or leaves government service, 10 percent of the employee's salary will be transferred into this account with a matching contribution from the Govt. When the person retires, he will be able to use these savings to take care of the needs and expenses of his family during old age.
Yes
You can visit any of our designated branches for submit your NPS subscription form along with the NPS Constribution Slip (NCIS) and an Initial contribution amount of Rs.500/-. The subscription Form and Contribution Slip will be available at the branches. The same can also be downloaded from http://pfrda.org.in/.
- He/She should be a resident Indian.
- The subscriber should be between 18 and 55 years on the date of application.
- He/she has to sprovide the KYC documents (Identity AND Address proof as per PFRDA guidelines) for registering to NPS.
Yes. If you wish, you will be free to change the PFM and move all your savings to another PFM of your choice.
More detailed information is available on http://pfrda.org.in/. Click on NPS Architecture.