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Pension Fund Regulatory and Development Authority

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67 views

Pension Fund Regulatory and Development Authority

Uploaded by

Sarvesh Abrol
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Pension Fund Regulatory and Development Authority

Introduction to National Pension System - NPS

 NPS notified on 22nd Dec 2003 for central government employees joining
service on or after 1st Jan 2004 and replaced existing defined benefit pension.

 NPS has been adopted by almost all the States for its employees.

 NPS was extended to all citizens of Indian on voluntary basis from May 2009.

 NPS was extended to corporates in Dec 2011.

 The Pension Fund Regulatory and Development Authority (PFRDA) regulates


and administers NPS under the PFRDA Act, 2013.
Features of NPS
Types Of Accounts:

Tier II Account
Tier I Account
Optional Account with active Tier-I
Pension Account
No tax benefits
Tax benefits available
Unrestricted withdrawal
Restrictions on withdrawal
Min. Contribution to
Min. Contribution Rs. 500
open Rs. 1000
Min. Contribution per year Rs. 1000
Min. Contribution Rs.
No limits on Contributions 250
No limits on
Contributions
Enrollment Procedure

• Procedure for registration in NPS - Offline


 Fill up the mandatory fields on the Subscriber registration form.
 Submit KYC documents supporting Proof of identity, address and
date of birth.
 Submission of form to the POP-SP.
 Subscriber to make first contribution with a minimum amount of
Rs. 500 for Tier I & Rs. 1000 for Tier II account.
 Issuance of receipt number by POP-SP as acknowledgement to
subscriber to track the status of application.
Enrollment in NPS

 Time frame for PRAN Generation


within 7 to 10 days of receipt of application form by
 PRAN Generation Central Record Keeping Agency(CRA)

Within 20 days of submission of application form to


 Dispatch of PRAN kit POP/POP-SP
Enrollment for NPS - Online

 Online Process
 It is now possible to open an NPS account in less than half an hour. Opening an account
online (enps.nsdl.com) is easy, if you link your account to your PAN, Aadhaar and mobile
number.
 You can validate the registration using the OTP sent to your mobile. This will generate a
PRAN (Permanent Retirement Account Number), which you can use for NPS login.
Flexible options for contributions
Three flexible variations of contributions from employer and employee

Equal Contribution
contributions by from either the
employer and employer or the
employee employee

Pension Fund Regulatory and Development Authority


NATIONAL PENSION SCHEME: TAX EFFECT

🞭 Contribution to NPS is allowable as deduction u/s 80CCD(1) up to Rs.1.5 lakhs


under sec 80 CCE/80C
Subject to the following ceiling :
A. (i) For salaried employee 10% of his salary
(ii)Non salaried employee 20 % of his gross total income
B. Further deduction u/s 80CCD(1B)
Additional deduction up to 50,000/-

🞭 Deduction to NPS scheme for contribution by the Employer u/s 80CCD(2)


INVESTMENT OPTION
Asset Allocation

Active Choice AutoChoice


Auto Choice

Asset Class ‘E’ - EQUITY - Max 75%


Aggressive Life Cycle Fund
Asset Class ‘C’ – CORPORATE BOND – Max 100%
Moderate Life Cycle Fund
Asset Class ‘G’ – GOVT. SECURTITIES – Max 100%

Conservative Life Cycle Fund


Asset Class ‘A’ – ALTERNATE ASSETS – Max 5%

Can be changed thereafter – four times a year


INVESTMENT OPTION:FUND MANAGERS

 Choice of Pension Fund Managers

1. HDFC Pension Fund Management Company Limited


2. ICICI Prudential Pension Funds Management Company Limited
3. Kotak Mahindra Pension Fund Limited
4. Reliance Capital Pension Fund Limited
5. SBI Pension Funds Private Limited
6. UTI Retirement Solutions Limited
7. LIC Pension Fund Limited
PARTIAL WITHDRAWAL FROM THE SCHEME

🞭 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 3 times during the entire tenure of
subscription with a gap of at least 5 years between two partial withdrawals.
WITHDRAWAL FROM NPS
Vesting Criteria Benefit
• Compulsory Annuitisation - minimum 80%
Before 60 years or
• Lump sum withdrawal - maximum 20%
superannuation age
• If Corpus< Rs. 2.50 Lac, complete withdrawal permitted
• Annuitisation - minimum 40%
• Lump sum withdrawal - maximum 60%

On attaining 60 years or • If Corpus< Rs. 5.00 Lac, complete withdrawal permitted


superannuation (as per service • Option of deferment or continuance up to 75 years of age
rules) and up to 75 years of • Lump sum deferment till age of 75 years and option to withdraw in
age. annual instalments.
• Annuity purchase deferment till the age of 75 years.
• Exit anytime during continuance / deferment

• Nominee will receive 100% of pension wealth in lump sum.


Death due to any cause
• Nominee can also purchase annuity with accumulated pension wealth.
EXIT FROM THE SCHEME
🞭 Subscriber can exit from the Scheme after 10 years of account opening or on attainment of the
age 60 years whichever is early. The payout will be defined as per the exit age of the Subscriber.

Exit before the age 60 years Exit at the age 60 years

• Up to 20% of Corpus can be withdrawn in lump • Up to 60% of Corpus can be withdrawn in lump
sum sum
• Balance amount needs to be invested in • Balance amount needs to be invested in
Annuity Annuity

If the Corpus is less than or equal to Rs.1 lakh, If the Corpus is less than or equal to Rs.2 lakhs,
There is no need to invest into Annuity. There is no need to invest into Annuity.
Entire amount can be withdrawn in lump sum Entire amount can be withdrawn in lump sum
TYPES OF WITHDRAWAL FORMS
Type Of Withdrawal

Request Central/State Corporate/All Citizens of Swavalamban (NPS-


Government India Sector Lite) Sector

Superannuation 101-GS 301 501

Premature Exit
102-GP 302 502

Death
103-GD 303 503
Thank You

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