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National Pension System (NPS)

Atal Pension
 

National Pension System (NPS) is a pension cum investment scheme launched by Government of India for central government staffs in the year 2004. The Central Government has made the National Pension System (NPS) to be available to all citizens of India from May 01, 2009. National Pension System (NPS), regulated by Pension Fund Regulatory and Development Authority (PFRDA), is an important milestone in the development of a sustainable and efficient voluntary defined contribution pension system in India.

National Pension System (NPS) is to provide old age security to Citizens of India. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return. The Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.

It has the following broad objectives :

  • Provide old age income.
  • Reasonable market based returns over the long term.
  • Extending old age security coverage to all citizens.
  • Under the NPS, an individual's savings is pooled in a pension fund.
  • These funds are invested by Pension Fund Regulatory and Development Authority (PFRDA) regulated professional fund managers as per the approved investment guidelines in the diversified portfolios comprising of government bonds, bills, corporate debentures and shares.
  • These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.

At the time of a normal exit from NPS, the subscribers may use the accumulated pension wealth under the scheme either to purchase a life annuity from a PFRDA empanelled life insurance company or withdraw a part of the accumulated pension wealth as lump-sum, if they choose to do so.

Tamilnad Mercantile Bank has been appointed by PFRDA to act as one of the Point of Presence (POP) for the NPS. Presently, we have designated branches to carry out the NPS activities as Point of Presence- Service Providers (POP-SP).

All citizens age from 18 years to 65 years of age.

As per the amendment made by Union Budget 2015 in tax provisions for FY 2015-16, if any customer contributes voluntarily towards the NPS scheme, then he would get an additional benefit of ₹ 50,000 under section 80CCD (1B) which would be over and above the ceiling limit of ₹ 1,50,000 as prescribed under section 80 CCE.

  • NPS offers a range of investment options and choice of Pension Fund Manager (PFMs) for planning the growth of your investments in a reasonable manner and see your money grow. Individuals can switch over from one investment option to another or from one fund manager to another, subject, of course, to certain regulatory restrictions. The returns are totally market related. Flexibility to choose between 8 Fund Managers:
    • The subscribers can choose between 8 Fund Managers namely -
      • ICICI Prudential Pension Fund Management Co. Ltd.
      • HDFC Pension Management Co. Ltd.
      • Kotak Mahindra Pension Fund Ltd.
      • LIC Pension Fund Ltd..
      • SBI Pension Funds Pvt. Ltd
      • UTI Retirement Solutions Ltd
      • Birla Sunlife Pension Management Limited
      • One Fund Manager must compulsorily be selected.
  • Flexibility to choose between Active and Auto Choice for distribution: A subscriber must choose between active choice and auto choice for distribution of his contribution. If active choice is selected, the subscriber must indicate the percentage distribution between corporate, gilt and equity. The maximum investment allowed in equity is 75%.
  • Simple : Opening an account with NPS provides a Permanent Retirement Account Number (PRAN), which is a unique number and it remains with the subscriber throughout his lifetime. The scheme is structured into two tiers:
    • Tier-I account : This is the non withdrawal Permanent Retirement Account in which the accumulations are deposited and invested as per the option of the subscriber.
    • Tier-II account : This is a voluntary withdrawal account which is allowed only when there is an active Tier I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of the subscriber as and when claimed
Particulars Tier 1 Tier 2 #
Entry Age (years) 18 ~ 65 18 ~ 65
Minimum contribution to open A/c Rs. 500/- Rs. 1,000/-
Minimum contribution in financial year Rs. 1,000/- N.A.
Minimum amount per contribution Rs. 500/- Rs. 250/-
AMC NSDL (p.a.) Rs. 95/- Nil

 

Fund Management Fee (p.a.) ### 0.01% of AUM 0.01% of AUM
Charge per contribution 0.25% of contribution or Rs. 20/- minimum ##. 0.25% of contribution or Rs. 20/- minimum ##.
  • Tier 1 account is mandatory to open a Tier 2 account.
  • ## Initial account opening charge of Rs. 200/- + Goods & Service Tax (GST) as applicable on a one time basis.
  • ### with effect from Nov 01, 2012

Submit PRAN application form to your nearest Point Of Presence - Service Provider (POP-SP) You can go to your nearest POP-SP and submit the PRAN application along with the KYC documents. PRAN card will be sent to your correspondence address by CRA.

  • Permanent Address Proof (Aadhaar Card/Voter ID/Driving Lisence)
  • Communication Address Proof (Aadhaar Card/Voter ID/Driving Lisence), (Electricty Bill/Telephone Bill/Telephone Bill)*
  • PAN card Copy (Mandatory)
  • Cancelled Cheque Leaf / Bank Certificate issued by branch.
  • Once application submitted at the branch after all process customer will be allotted Permanent Retirement Account Number.
  • After allotment of PRAN number customer can start contribution through online(by logging into https://cra-nsdl.com/CRA/) or through branch
  • If customer wants to activate tier 2 account they can activate through online (by logging into https://cra-nsdl.com/CRA/) or through branch.
  • If customer wants to modify any details like name, father name, nomination, Pension Fund Manager (PFM) can contact branch and submit the modification application.
  • If customer wants to modify any details like Mobile No, E-Mail ID, PRAN reissue, I-Pin/T-Pin request either they can modify through online by logging into https://cra-nsdl.com/CRA/ of through branch by submitting modification application