Scheme Information

As per the present guidelines of Pension Fund Regulatory and Development Authority(PFRDA), contribution towards pension will be invested in the default schemes for State Government of three Pension Fund Managers (PFMs), viz, LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited. The proportion in which contributions are allocated among these three PFMs is decided by each of the state government, which in mentioned in the Statement of Transaction. Each of the PFMs will invest the funds in the proportion of 85% in fixed income instruments and 15% in equity and equity related instruments. Hence, in the application form for PRAN, the employees of State Government and State Autonomous Bodies need not mention the details of the schemes.

About NPS
What is New Pension System? The Central Government has introduced the Defined Contribution based Pension System known as the New Pension System (NPS) replacing the existing system of Defined Benefit Pension with effect from January 01, 2004. NPS is applicable to all new employees of Central Government service, except Armed Forces, who have joined Government service on or after 1st January 2004.The person (employee/citizen) who joins the NPS will be known as Subscriber in the NPS. Under the NPS, each Subscriber will open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).Under NPS, two types of account would be available to subscribers i.e., Tier I & Tier II; Tier I account - where a subscriber contributes his / her savings for retirement in to a non-withdrawable account, and a Tier II account - a voluntary savings account from which subscribers are free to withdraw his / her savings whenever he/she wishes. The facility of Tier II account was made available from December 1, 2009 to all citizens of India including Govt. employees mandatorily covered under NPS. An active Tier I account will be a pre requisite for opening of a Tier II. What are the benefits of NPS? 1: It is transparent - NPS is transparent and cost effective system wherein the pension contributions are invested in the pension fund schemes and the employee will be able to know the value of the investment on day to day basis. 2: It is portable - Each employee is identified by a unique number and has a separate Permanent Retirement Account which is portable i.e., will remain same even if an employee gets transferred to any other office. 3: It is simple - All the subscriber has to do, is to open an account with his/her nodal office and get a PRAN. 4. It is regulated - NPS is regulated by PFRDA, with transparent investment norms & regular monitoring and performance review of fund managers by NPS Trust. What is Swavalamban Yojana? Swavalamban Yojana is a scheme announced by the Government of India under which for each NPS account opened in the year 2009-10 and 2010-11, Government will contribute Rs. 1000 per year for the next three years, subject to certain conditions such as eligibility criteria etc as laid down by Government of India. Who are eligible for Swavalamban Yojana? For the purpose of this scheme, a person will be deemed to belong to the unorganised sector, if that person : is not in regular employment of the Central or a state government, or an autonomous body/ public sector undertaking of the Central or state government having employer assisted retirement benefit scheme, or

is not covered by a social security scheme under any of the following laws Employees Provident Fund and miscellaneous Provisions Act,1952 The Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 The Seamens Provident Fund Act, 1966 The Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955 The Jammu and Kashmir Employees Provident Fund Act, 1961

The scheme will be applicable to all persons in the unorganised sector subject to the condition that the benefit of Central Government contribution will be available only to those persons whose minimum contribution in Tier I account is Rs.1,000 per annum and maximum of Rs. 12,000 per annum, for both Tier I and II taken together. The central government employee will not be eligible for swavalamban yojana. What are the tax benefits of NPS? At present, the tax treatment for contribution made in Tier I account is EET, "Exempted-ExemptedTaxed" i.e., the amount contributed is entitled for deduction from gross total income upto Rs. 1.00 lac (along with other prescribed investments) as per section 80C (as per the provisions of the Income Tax Act, 1961 as amended from time to time). The appreciation accrued on the contribution and the amount used by the subscriber to buy the annuity are not taxable, Only the amount withdrawn by the subscriber after the age of 60 is taxable. As per the proposed Direct Tax Code, the tax treatment for contribution in Tier I account will be "Exempted-Exempted-Exempted" i.e. in addition to the existing benefit, the amount withdrawn by the subscriber after the age of 60 will be exempted from tax like PPF. Which document do I use as investment proof in order to avail the tax benefit? A print out of the Statement of Transaction (SOT) could be used as a document for claiming Tax benefit. Can a subscriber get loan under NPS ? No. At present, a subscriber cannot avail a loan against his / her NPS holdings.

Entities Involved
Who is the regulator for NPS? Pension Fund Regulatory and Development Authority (PFRDA): An autonomous body set up by the Government of India to develop and regulate the pension market in India. PFRDA is the regulator for NPS. Who are the other entities in NPS? The entities involved in NPS are as follows NPS Trust: The NPS trust has been constituted for taking care of the assets and funds held under NPS in the interest of the beneficiaries (subscribers). Central Recordkeeping Agency (CRA): The recordkeeping, administration and customer service functions for all subscribers of the NPS are being handled by National Securities Depository Limited (NSDL), which is acting as the Central Record-keeper for the NPS. Pension Funds (PFs)/Pension Fund Managers (PFMs): The three Pension Fund Managers (PFMs) appointed by PFRDA manage the retirement savings under the NPS. For Tier II account, there are six PFMs appointed by PFRDA. Trustee Bank: The Trustee Bank appointed under NPS shall facilitate fund transfers across various entities of the NPS system viz. PFMs, ASPs, Subscribers, etc. Bank of India (BoI) has been appointed as the Trustee Bank.

Annuity Service Providers (ASPs): ASPs would be responsible for delivering a regular monthly pension to the subscriber after subscriber's exit from the NPS. ASP is yet to be appointed by PFRDA. Nodal offices: Nodal offices i.e., PrAO(Principal Accounts Office), PAO(Pay and Accounts Office) and DDO(Drawing and Disbursing Office) (or equivalent offices in case of State Governments/Autonomous Bodies) are the first points of interaction of the NPS subscriber with the NPS architecture. For any transaction or information regarding the Tier I account, a subscriber needs to contact his/her associated nodal office. Point of Presence (POP): Points of Presence (POPs) are different financial Institutions who act as the first points of interaction of the subscribers for Tier II account. The authorized branches of a POP, called Point of Presence Service Providers (POP-SPs), will act as collection points and extend a number of customer services to NPS subscribers for Tier II accounts only. Central Recordkeeping Agency Facilitation Center (CRA-FC): CRA-FC is the entity appointed by NSDL to extend various services under NPS, to its users across the country. The entities who have been appointed as CRA-FC shall establish multiple branches across the country to provide services to the nodal offices, POPs and POP-SPs.

Can I change my POP or POP-SP for my Tier II account? For Tier II account, a subscriber can change the POP-SP within the same POP. The option to change the POP will be available shortly. What is the procedure for changing the POP-SP? A subscriber can change the POP-SP by submission of form UoS-S5 to the POP-SP associated at present or to the new POP-SP. What are the services offered by CRA? Following are the services offered by CRA to the Subscribers 1. CRA registers the Subscribers and allot unique Permanent Retirement Account Number (PRAN) to them.
2. CRA issues a PRAN card and User-ID, I-PIN and T-PIN to access CRA website and CRA call

centre. 3. CRA maintains the Permanent Retirement Account of the Subscribers and facilitates the creation of units in Subscribers account as per the contribution details and funds received from the Nodal Offices. 4. At the end of every financial year, CRA sends a physical Statement of Transaction (SOT) to the Subscriber containing the details of the transactions in Subscribers Permanent Account. The SOT as on March 31st of every year will be sent within 3 months i.e. before June 30th.
5. CRA registers grievances (received through CRA system or through G1 form) and send the

resolution details to the Subscribers by email.

6. CRA provides I-PIN based login to CRA website for subscribers to view their account details.

Subscriber Registration
Who can subscribe in NPS? NPS is applicable to all new employees of Central Government service (except Armed Forces) and Central Autonomous Bodies joining Government service on or after 1st January 2004. For State Governments, State Autonomous Bodies and Corporates, the dates may vary. Any other government employee who is not mandatorily covered under NPS can also subscribe to NPS under "All Citizens of India" through a Point of Presence - Service Provider (POP-SP). Can I obtain/use more than one PRAN? No, an individual can hold only one PRAN. The PRAN issued will be unique, permanent and portable.

What is the procedure for registration of Subscribers in the CRA system for Tier I account? For the purpose of registration, (Tier I account)
1. Subscriber shall submit form S1 to the DDO (or equivalent offices).

2. The DDO shall provide and certify the employment details.

3. Subsequently, the DDO shall forward the form to the respective PAO / DTO. 4. The form should be submitted to CRA for registration

Who are IRA compliant subscribers? Subscribers who have registered by duly filling up a form and whose address, photograph and signature are maintained in CRA system are termed as IRA Compliant subscribers. These subscribers have a PRAN Card issued by CRA. Subscribers who have not been issued a PRAN Card are termed as Non-IRA Compliant subscribers. What are the advantages of IRA compliant subscriber? The advantages of IRA compliant subscriber are given below 1. PRAN cards are issued to all IRA compliant subscribers. 2. Subscriber can check their account balance online using I-PIN. 3. Subscriber can lodge a complaint against any entity using I-PIN. 4. Subscriber can access CRA toll free helpline using T-PIN. 5. No proof of identity and address is required during activation of Tier II account. Where do I get the registration forms for Tier I? Subscriber Registration form for Tier I account can be downloaded from the CRA website www.npscra.nsdl.co.in. How much time is required for registration? After the registration form is submitted to DDO, the same is forwarded to a CRA - Facilitation Centres after authorisation by the PAO. PRAN is generated and the PRAN card is printed and despatched within 20 days from the date of receipt of duly filled registration form at the CRA - Facilitation Centre. Is online registration possible? No, at present, the provision for online registration is not available under NPS. Subscriber has to fill in the physical application form. How can I check the status of my PRAN application? The subscriber can check the status with the associated nodal office who has submitted the form to CRA-FC. Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. This service is currently available to State Government employees and the same will be made available to the Central Government employees shortly. How do subscribers come to know about their PRAN? Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number provided by the subscribers during registration. For security reason, only the last four digits are mentioned in the alert. Subscribers can know the PRAN on receipt of the PRAN Kit, or they can approach their PAO for the PRAN. Can a CRA-FC reject the Subscriber application forms?

PAO will perform verification checks, such as whether name is mentioned, photograph is attached, signature is present, other mandatory fields are properly filled, before accepting the form. In case the application form is not filled with all the required details, CRA- FC will not accept the registration form. CRA-FC will intimate the PAO regarding rejection of forms. What is PRAN and PRAN Kit? On successful registration, a PRAN (Permanent Retirement Account Number) will be allotted to the subscriber. A PRAN Kit containing PRAN card, Subscriber details (referred as Subscriber Master List), and an information booklet is sent along with the T-Pin and I-Pin to the associated nodal office. The PRAN Card is a document with PRAN, subscribers name, father's name, photograph and signature/thumb impression. This card proves the completeness of information in the CRA system. A copy of the card is required for Tier II activation and also for subsequent contribution in Tier II account. The Subscriber Master List shows all the information as provided by the subscriber in his / her application and accordingly captured in CRA system. A subscriber may verify the correctness of the information submitted for registration by looking at the Subscriber Master List. What is the use of T-PIN ? Subscribers can call at CRA's toll free number 1800 222 080 and access the Interactive Voice Response (IVR) or speak to our customer service executive using the T-PIN (Telephonic Personal identification Number). What are the different options in the IVR available to the subscribers? Subscribers have the following options in IVR 1. Change of T-PIN 2. Check holding details 3. Check the status of any change request (such as change of address, nomination etc.) 4. Check details of last contribution credit and last withdrawal request (for Tier II only). How do subscribers check the status of the change request through IVR? After accessing the IVR using the T-PIN, subscribers need to select the option of checking the status of the change request and input the acknowledgement number generated by the CRA system once the request is processed by the PAO. Subscribers can also speak to the call centre executive to check the status. Whom to contact for non receipt of PRAN Card? PRAN Card is despatched to the nodal offices within 20 days from the day of receipt of duly filled registration form at the CRA-FC office. In case of non-receipt of the PRAN Card, a subscriber can check with the associated nodal office or he can check the status by accessing CRA website : http://www.npscra.nsdl.co.in/ and click on link "Track the status of the PRAN Card". Whether private employee covered under Employees Pension Scheme (EPS-95) or corresponding State Government Schemes will be eligible for contributing under NPS? Yes, they can independently join NPS and contribute in Tier I and Tier II account. What happens to associated Nodal Office in case a subscriber get transferred? As the PRAN is portable, in case of transfer, PRAN remains the same. The subscriber's association with the new nodal office in the CRA system will happen once his / her contribution details are uploaded by his / her new nodal office in the CRA system. How can I exit from NPS before the age of 60? A government employee mandatorily covered under NPS cannot exit from NPS till he resigns or retires from the service. In case of resignation, at least 80% of the pension wealth to purchase a life

annuity from any IRDA - regulated life insurance company. Remaining 20% of the pension wealth may be withdrawn as a lump sum. Who can open a Tier II Account? Any government employee who has an active Tier I account can approach any POP-SP for activation of his / her Tier II account. What is the procedure for registration of Subscribers in the CRA system for Tier II account? For Tier II account, a government employee with an active Tier I account needs to approach a POPSP. If the employee has received a PRAN Card, then he should submit a copy of the PRAN Card along with Tier II activation form (UOS-S10) and minimum contribution of Rs. 1000/-. If the employee does not have a PRAN Card, then he should submit a Tier II activation form (UOSS11) along with the KYC documents, minimum contribution of Rs. 1000/- and a completely filled up NPS Contribution Instruction Slip. Where do I get the registration forms for Tier II? IRA Compliant subscribers can download UOS-S10 whereas IRA Non-Compliant Subscribers can download UOS-S11 form from www.npscra.nsdl.co.in.. Is selection of investment option - Auto or Active choice mandatory for Tier II? Yes, but in case investment option is not mentioned, for Tier II, all contributions would be channelled into auto choice, a Lifecycle fund. However, investment option in Tier II can be changed subsequently. Are bank details mandatory for Tier II account? Yes, bank account details are mandatory for Tier II account. After a withdrawal request is processed in Tier II account, the funds are transferred by Trustee Bank to the subscriber's bank account as per these details. What happens to associated POP-SP in case a subscriber get transferred? For shifting subscriber's Tier II account to any other POP-SP, he may submit the UOS-S5 form to his / her existing POP-SP or the new POP SP to avail their services (change of POP will be available shortly).

Contribution
How will I contribute in Tier I Account? Under Tier I, mandatory contribution will be through a subscriber's nodal office. Every month, 10% of his / her salary (basic + DA) and equivalent governments contribution will be invested in NPS. For employees under corporate sector, the contribution amount depends on the agreement between the subscriber and the employer. No separate contribution can be made by the subscriber. How much does a subscriber need to contribute in Tier I? Contribution in Tier I, depends on the basic salary of the subscriber and there is no minimum amount. Where do I submit my contribution for Tier I? Tier I - contribution amount is deducted from the salary and remitted by the concerned Nodal Office. When will the units be credited to my NPS account in TierI? In case of Tier I account, subscriber's associated nodal office will upload his / her monthly pension contribution details to CRA along with transfer of funds to the Trustee bank appointed for this purpose. CRA will match the contribution details uploaded by the nodal office and the amount

confirmed to be received by Trustee Bank and instruct the Pension Fund Managers to invest the contribution as per your scheme setup preference. The units created will be credited by CRA to your Permanent Retirement account. How will I contribute in Tier II Account? To contribute in Tier II account, the subscriber needs to deposit the contribution amount (Minimum Rs. 250/-) along with duly filled NCIS to any POP-SP. How much does a subscriber need to contribute in Tier II? Govt. Employee can voluntary contribute through POP-SP for Tier II and the minimum requirement is given below. 1. Minimum contribution at the time of account opening- Rs.1000 2. Minimum amount per contribution - Rs.250/3. Minimum number of contributions in a year - 1 Minimum balance of units worth Rs.2000/- to be maintained at the end of each financial year. How many contributions to be made? Under Tier II, there should be at least 1 contribution in a financial year. Where do I submit my contribution for Tier II? For Tier II, subscribers can submit the contribution to any of the POP-SP. List of POP-SPs are available at CRA website www.npscra.nsdl.co.in.. Subscriber can select a nearest POP-SP. Can I make contributions in my NPS account before receipt of the PRAN Card? Under NPS, Subscriber accounts are identified by unique PRAN allotted to them by CRA. The Nodal office can remit for Tier I account, once PRAN is generated and need not wait till receipt of PRAN Kit from CRA. However, in order to activate the Tier II account, subscriber needs to submit a copy of the PRAN Card along with the duly filled UOS-S10 form. (Except in case of Non-IRA compliant subscriber, wherein Tier II can be activated without PRAN card). When will the units be credited to my NPS account in TierII? In case of Tier II account, units will be credited once there is match between the contribution details submitted by POP / POP-SP to CRA and corresponding funds receipt confirmation given by Trustee Bank. The day units are credited, the same day's NAV is applicable. There will be a time lag between the time subscriber deposits Cash/Demand Draft/Cheque with the POP-SP and the of credit of units to the Permanent Retirement Account, which may range upto 7 working days. When will a contribution get credited to my NPS account? For Tier II account, there will be a time lag between the time a subscriber deposits Cash/DD/cheque with the POP-SP and the time of credit of units to his / her account, which may range upto 15 working days at the time of initial registration and upto 7 working days for subsequent contribution. Once the contribution is credited to his / her account, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. This service is currently available to State Government employees and the same will be made available to the Central Government employees shortly. Can someone else make contribution on my behalf? It is recommended that the contribution is made by the concerned subscriber e.g., cheque in the name of the subscriber.

Maintenance
What will I do if there are changes in my PRAN data?

Subscriber can update his / her details in Tier I in CRA system by submitting a change request form to the DDO. Subscriber needs to submit the following forms for change request 1. Form S2 - for change in personal or nomination details or request for re-issue of T-PIN/I-PIN or

Reprint of PRAN card.

2. Form S3 - Request for change in Scheme Preference or Switch. 3. Form S7 - Request for change in Photograph and/or Signature.

To change any details for the Tier II account, the request needs to be submitted to the respective POP-SP. What are the details of the Subscriber can a Nodal office update? Nodal Office can update the following requests of the employee/subscriber 1. Change in Personal details including Bank details; 2. Change in Employment details; 3. Change in Nomination details; 4. Reissue of I-PIN and T-PIN; 5. Reprint of PRAN Card. Nodal office can also generate and print Statement of Transaction and Statement of Holding for an employee associated with it. For any information related to Tier II, the subscriber needs to approach the POP-SP through whom the Tier II account is activated. Who can be a Nominee and how are the details to be filled in the form? Only an Individual can be a nominee. Subscriber can nominate a maximum of three nominees. Subscriber cannot fill the same nominee details more than once. Percentage share value for all the nominees must be integer. Decimals/fractional values are not accepted in the nomination(s). Sum of percentage share across all the nominees must be equal to 100. If sum of percentage is not equal to 100, entire nomination will be rejected. If a nominee is a minor, then nominee's date of birth and guardian details shall be mandatory. The registration of nominee details will not be done unless all details are duly filled up in the form. A subscriber may refer the instructions for nominations available in the registration form (S1) Is there any restriction on number of Nominees? Yes. Subscriber will be allowed to register upto three nominees only. Can a minor be a nominee? Yes, minor can be a nominee. In such case, subscriber will be required to provide guardian's details and date of birth of the minor. How to request for a duplicate PRAN card? In case of loss or damage of PRAN card, the subscriber needs to submit a duly filled S2 form to the respective DDO. After verifying the form, the PAO will enter and authorise the request in the CRA system. Subsequently, the request is processed by CRA and a fresh PRAN Card is printed and sent to respective nodal office for onward distribution to the subscribers. This is a chargeable transaction. How to request for re-issue of I-PIN / T-PIN? For re-issue of I-PIN / T-PIN, the subscriber needs to submit a duly filled S2 form to the respective DDO. After verifying the form, the PAO will enter and authorise the request in the CRA system. Subsequently, the request is processed by CRA and a fresh I-PIN / T-PIN is printed and sent to respective nodal office for onward distribution to the subscribers. This is a chargeable transaction.

Can a subscriber view the status of its request for any change in personal, scheme setup, switch etc.? Yes, subscriber can check with their PAO or can call at CRA's toll free number 1800 222 080 for the status of pending request. Subscriber can also login to https://cra-nsdl.com/CRA/ using the IPIN and check the status. Will I get any Annual Account Statement for my PRAN? The Annual Account Statement as of March 31st of every year, will be sent to the registered address. Also if a subscriber wishes to have a statement of transaction on an adhoc basis, he/she can log into CRA website using the I-PIN. Subscriber needs to follow below mentioned path Views --->Statement of Transaction - CG--->Mention the PRAN After entering the data, statement of transaction will be displayed on the screen. Subscriber can also access the account details by calling the toll-free number 1800 222 080. They can also get in touch with their PAO to view/print the Annual Account Statement. Can I reset the I-PIN (Internet Password) online? No Can I reset the T-PIN (Telephonic Password)? Yes, the subscriber has an option to get his/her T-PIN reset. The subscriber can call the CRA toll free number 1800-222-080 to access IVR (Interactive Voice Response) system. After selecting the appropriate option, system will prompt the subscriber to reset T-PIN by providing the existing T-PIN and the required new T-PIN. In case subscriber has forgotten T-PIN, upon successful verification of the personal details, the subscriber will be transferred to a helpline executive to enable him/her to change the T-PIN online.

Grievance
How do I register my grievances/complaints ? Yes, Subscriber can raise the grievance/compliant through Call Centre using T-PIN or through CRA website using I-PIN. A subscriber can also contact his / her PAO, who can also raise a grievance on their behalf. Subscriber can check the status of the grievance in CRA website at https://cransdl.com/CRA/grievanceStatusLim.do A subscriber can also send a duly filled G1 form to CRA for logging a grievance. How will the grievance get resolved? Whenever a subscriber raises a grievance, a system generated alert goes to the entity against which the grievance is raised. The respective entity then resolves the grievance and post resolution details in CRA system. How do I know the status of the grievance lodged by me? When a subscriber registers a grievance in the CRA website (https://cra-nsdl.com/CRA/), an unique token number is assigned to each and every grievance. Subscriber can use that token no. to know about the status of the grievances either through the call centre or through the CRA web-site.

Withdrawal
When and how can I withdraw the amount from Tier I account? Withdrawal of Tier I account: As per the guidelines for withdrawal stipulated by Pension Fund Regulatory & Development Authority (PFRDA)/Ministry of Finance(MOF), the subscribers can exit form New Pension System (NPS) on his / her retirement, resignation or death.

* Retirement : On attaining the age of 60 years, a subscriber would be required to invest minimum 40% of his / her accumulated savings (pension wealth) to purchase a life annuity from any IRDA (Insurance Regulatory and Development Authority) - regulated life insurance company. A subscriber may choose to purchase an annuity for an amount greater than 40%. The remaining pension wealth can either be withdrawn in a lump sum on attaining the age of 60 or in a phased manner, between age 60 and 70, at the option of the subscriber. * Resignation: On resignation of the subscriber, 80% of the corpus has to be annuitized and the subscriber can withdraw remaining wealth. * Death : On death, the entire corpus of the subscriber will be handed over to the nominee of the subscriber. However, the operational procedures for the withdrawal are yet to be finalized by PFRDA in consultation with MOF. Once they are finalized the offices will be intimated about the same. The withdrawal request should be routed through the associated PAO. What is Annuity? Annuity in the context of NPS refers to the monthly sum that will be received by the subscriber from the Annuity Service Provider after he attains the age of 60. Who is the Annuity service provider? Annuity Service Providers (ASPs) is the entity who will be responsible for managing the funds (allocated for buying annuity) and payment of the pension after a subscriber attains the age of 60. The ASPs will be the entities regulated by IRDA. At present, ASP is not appointed by PFRDA. What happens if the subscriber dies after attaining the age of 60? The mode and manner of payment of amount (if any available) will depend on the type of annuity plan / scheme selected by the subscriber while buying the annuity. How can I exit from NPS? No employee/subscriber can exit from NPS till he is mandatorily covered under NPS. In case of death of the subscriber before the age of 60, the nominee will receive the entire sum. In case of resignation or voluntary retirement, please refer to the question on withdrawal. What happens to my investments if I discontinue the scheme? A subscriber who is mandatorily covered under NPS can not exit from NPS till he is employed. In case of resignation or voluntary retirement, please refer to the question on withdrawal. What happens to the accumulated amount at the time of death of the employee? In the event of death of the employee/subscriber, the nodal office will enter a withdrawal request in the CRA system. After the request is processed, a cheque is issued favouring the nominee and is despatched to the nodal office. In case no nominee is registered in the CRA system, the cheque is issued favouring the associated PAO. In case there are more than one nominee, the sum will be distributed to nominee in the ratio as recorded in the system. How do I redeem from Tier II account? In order to withdraw from Tier II account, the subscriber needs to submit a duly filled UOS-S12 to the associated POP-SP. If the request is entered and authorised in CRA system by the POP/POP-SP before 1.30 PM, then it goes for same day's processing, or else it goes for the next business day. The redemption amount may vary due to the variation of NAV. Units are redeemed based on the NAV declared at the end of the processing day. On T+3 days, (T being the date of processing) the funds are transferred from the Trustee Bank to subscriber's bank account as registered in the CRA system.

Scheme Details

What is meant by Scheme Preference ? Scheme Preference is the Pension fund schemes option chosen by the subscriber for investing the pension contribution amount. At present, there is only one default scheme for Tier I. The contribution of all the Subscribers will be invested in this default scheme. In the default scheme, the contribution is allocated to three PFMs, viz. SBI Pension Funds Private Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited in a predefined proportion and each of the PFMs will invest the funds in the proportion of 85% in fixed income instruments and 15% in equity and equity related instruments. For Tier II, the government subscriber has been given the flexibility to choose one out of six Pension Fund Managers(PFMs) and also the percentage in which the selected PFM will invest the funds. The six PFMs are

ICICI Prudential Pension Funds Management Company Limited IDFC Pension Fund Management Company Limited Kotak Mahindra Pension Fund Limited Reliance Capital Pension Fund Limited SBI Pension Funds Private Limited UTI Retirement Solutions Limited

The three asset classes are Equity (E), Corporate bonds (C) and Government Securities (G). A subscriber choose Active Choice, he can specify the percentage in which his / her money is to be invested in these asset classes. However, allocation in Equity cannot be more than 50%. A subscriber opts for Auto Choice, system will automatically calculate the asset allocation percentages based on the subscriber's age. What are the Assets permitted for NPS funds Investment? At present under Tier I, there is only one scheme (default) available to Central/State Govt. employees under which 85% of your money is invested in debt instruments and upto 15% in equity and equity linked mutual funds. Under Tier II, the sets of assets to be considered for investment are segregated based on their risk{return characteristics)
1. Asset class E : "High return, High risk" (equity market instruments). 2. Asset class G : "Low return, Low risk" fixed income instruments. The best example of this are

central government bonds.

3. Asset class C : "Medium return for credit risk" bearing fixed income instruments. Examples of

these are bonds issued by firms. How are the returns calculated in Tier I and Tier II account ? Is there a assured return / div / bonus? For Central Government employees mandatorily covered under NPS, the total contribution uploaded in an employee's Tier I account is divided among three PFMs. viz. SBI Pension Funds Private Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited in a predefined ratio and units are allotted in the subscribers account. For State Government employees mandatorily covered under NPS, the total contribution uploaded in an employee's Tier I account is divided among the three PFMs. viz. SBI Pension Funds Private Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited in a ratio as decided by the State Government and units are allotted in the subscribers account accordingly. The PFMs invest the money in different financial instruments within the investment guidelines laid down by PFRDA and declare Net Asset Value(NAV) at the end of each business day. Accordingly, based on the NAV units are credited in the subscriber's account. The present value of the investment is arrived by the units held multiplied by the NAV.

In Tier II, the only difference is that the subscriber can select any one of the 6 PFMs and can also select the ratio in which his / her money is invested in one or more asset class viz. Equity, Corporate Debt and Government Bonds. The return under NPS is market driven. Hence, there is no guaranteed/defined amount of return. The returns generated through investments are accumulated and is not distributed as dividend or bonus. What is Net Asset Value (NAV)? Also known as NAV, this is the price of one unit of a fund. NAV is calculated at the end of every working day between Monday and Friday. It is calculated by adding up the value of all the securities and cash in the fund's portfolio (its assets), subtracting the fund's liabilities, and dividing that number by the number of units that the fund has issued. The NAV increases (or decreases) when the value of the fund's holdings increase (or decrease). NAV of different PFMs may differ. Even the different schemes under the same PFM will have different NAV. How do I change my scheme preference? Scheme Preference change option is not available to Govt. subscribers for Tier I. For Tier II, the subscriber has to submit the physical application form (Form-UOS-S3) to change Scheme Preference. However, such changes can be done only once in a financial year. You can submit the request to your POP-SP through whom your Tier II account is activated. Please collect a 17 digit acknowledgement number against your request. The transaction is chargeable. How do a subscriber track the status of the change request? Yes, subscriber can either check with their POP-SP or can call at CRA's toll free number 1800 222 080 for the status of pending request. Please mention the 17 digit acknowledgement number received from POP-SP against your request. Will I get any intimation for the change in scheme preference? CRA system will send an e-mail to the Subscriber (if the email ID is available) once the request is processed. How many times a subscriber has an option to change his / her scheme preference? At present, this facility is not available for Tier I account of Central/state Govt. employee. In future, subscriber will have the option of selection of PFM and Investment schemes (as and when PFRDA approves it). For Tier II account, you can request for a change of scheme preference once in a financial year. What is Auto choice? At present under Tier I, this facility is not available for central/state govt. employees. In future, you will have option to select your investment choice as and when PFRDA approves it. For Tier II account, Govt. Employee can select his / her investment choice as auto choice. Under this type of investment choice, investment will be made in a life cycle fund in the schemes of Pension Fund Manager chosen by the subscriber. The fraction of funds invested across three asset classes will be determined by a Pre-defined portfolio. What is Active choice? At present under Tier I, this facility is not available for central/state govt. employees. In future, subscribers will have option to select your investment choice as and when PFRDA approves it. For Govt Employee who opted for Tier II, under this type of investment choice, subscribers have an option to choose a fund manager and provide the ratio in which his / her funds to be invested among the asset classes. What is Asset Class "E"?

At present under Tier I, this facility is not available for central/state govt. employees. In future, subscribers will have option to select your investment choice as and when PFRDA approves it. For Govt Employee who opted for Tier II and selected active choice, three assets class are there (E, C & G) Asset Class "E" are the Investments in Equity shares. Money will be invested in index funds that replicate the portfolio of a Particular index(Like BSE sensitive index and NSE nifty fifty index.).Max investment in this class is 50% of total contribution. What is Asset Class "G"? At present under Tier I, this facility is not available for central/state govt. employees. In future, you will have option to select your investment choice as and when PFRDA approves it. For Govt Employee who opted for Tier II and selected active choice, three assets class are there (E, C & G). Asset Class "G" is the Asset Class of lowest risk. The most natural candidates for lowest risk assets are bonds issued by the Central Government { called GOI bonds. These bonds have no default risk, and/or enormous depth for investments by pension funds. What is Asset Class "C"? At present under Tier I, this facility is not available for central/state govt. employees. In future, you will have option to select your investment choice as and when PFRDA approves it. For Govt Employee who opted for Tier II and selected active choice, three assets class are there (E, C & G). Asset Class "C" contains Bonds issued by any Entity other than Central Government. Here, the issuers can be state governments, municipal bodies, state government PSU/PSE like electricity boards, and private corporations. For Auto Choice, how do the proportion of E, C and G change? In Auto Choice, the proportion of E, C and G is determined by the subscriber's age. At each birthdate of the subscriber, these proportions are adjusted with age as mentioned in the life-cycle matrix. What is rebalancing as per regulatory requirement appearing in Statement of Transaction for Tier II account? As mentioned in the offer document of PFRDA, in case of subscribers who have opted 'Auto choice' investment option, the percentage of investment in the asset classes E/C/G will change as per the age of the subscriber as given in the 'Life cycle Investment Matrix'. The change happens on the date of birth of the subscriber. In this process, asset allocation ratio is changed and the existing assets are

redeemed and reinvested as per the new ratio of allocation.

Charges
What is the charge structure in NPS? In case of government subscribers, all the charges associated to Tier I account including Annual PRA Maintenance charge are paid by the employer. Tier II activation charge and transaction charges for Tier II is paid by the subscriber. The POP charges and the CRA charges are given in the table below. For details of other charges, please refer to the offer document. (link to offer document) Intermediary CRA Charge head Service charges* PRA Opening charges Rs. 50 Annual PRA 1 Maintenance cost perRs. 225 Rs. 5 1 account Charge per transaction Mathd of Deduction Through cancellation of units at the end of each quarter.

POP Initial (Maximum registration Permissible charge for each subscriber)

subscriberRs 100

0.25% of the initial contribution amount from Initial contribution upload subscriber subject to a minimum of Rs.20 and a maximum of Rs. 25,000/0.25% of the amountTo be collected upfront Any subsequentsubscribed by the NPS subject to transaction involvingsubscriber, minimum of Rs.20/- and a contribution upload maximum of Rs. 25000/-.

Any other transaction notRs 20 involving a contribution from subscriber *Service tax and other levies, as applicable, will be levied as per the existing tax laws. 1 CRA had reduced Annual Maintenance Charges (AMC) from Rs. 350 to Rs. 280 and Transaction Charges from Rs. 10 to Rs. 6 once the number of accounts (PRANs) crossed 10 lakhs. It was committed to reduce the charges once the number of accounts reaches 30 lakhs. However, with commendable increase in the number of subscribers in a short span of one year, CRA has reduced the AMC by almost 20% to Rs. 225 and Transaction Charges by more than 16% to Rs.5 even before reaching the milestone. How are the charges calculated and deducted from my account? CRA charges for Tier II account are deducted from the subscriber's account as on the last day of the calendar quarter. The billing cycle is 3 months i.e., 26th of the last month of the previous quarter to 25th of the last month of the current quarter. Lets assume, for the quarter ending September 2010 (billing cycle is June 26th to September 25th , 2010), for a PRAN, following are the applicable charges : Charge for 10 Transaction - Rs. 50 Service Tax including Education Cess - Rs. 5.52 Total Charges - Rs. 55.52 The value of holding of the subscriber as on September 29, 2010 is Rs. 10000 i.e., E - Rs.5000 (50%); C -Rs. 3000 (30%) and G - Rs. 2000 (20%). The charges of Rs. 55.52 will be recovered in the ratio of holdings Recovery

E - 50% of Rs.55.52 = Rs. 27.76 C - 30% of Rs. 55.52 = Rs. 16.65 G - 20% of Rs. 55.52 = Rs. 11.10

Lets assume that as on September 29, 2010, NAV for asset class E, C and G is 13, 12 and 11 respectively. Units redeemed from E - 27.76/13 = 2.1353 Units redeemed from C 16.65/12 = 1.3875 Units redeemed from G 11.10/11 = 1.0090