0 to 18 18 to 60 60 Onwards Age Group NPS provides a platform for saving to create corpus, to enable subscriber for purchasing Annuity post retirement What is NPS ? NPS is a defined contribution pension scheme which is highly efficient, technology driven system to save small amounts today, to build a fund for life’s second innings. Who Can Join ? You can join, if you are any or all of the following: • Citizen of India; Resident or Non-Resident • Age between 18-60 years, as on date of joining • Salaried or Self Employed • Complies with KYC norms
Built on a highly efficient, technology driven platform Unmatched Lowest cost of Investment Attractive Tax Benefits for Employees and Employers Attractive Market Linked Returns Prudentially Regulated by PFRDA Investments managed by experienced Pension Funds Safe, Secure and Easily Portable
NPS Architecture PFRDA 4 NPS Trust POP Fund Flow Trustee Bank Custodian Central Recordkeeping NAV POPSP Pension Funds Agency Online Information Flow Subscribers Annuity Service Funds Flow Providers
Tier-I account : Subscribers can contribute for retirement into this non-withdrawal account. Income Tax benefits as per IT Act, 1961 for Tier I. Tier-II account : Voluntary savings facility, where the subscriber can avail fund management facility at very low costs. Subscribers are free to withdraw amount from this account. However, tax benefits are not available. Currently, CSC is accepting registrations for Tier I only. Tier II will be available in next phase. Particulars Tier I Tier II Minimum Contribution at the time Rs. 500/- Rs.1,000/- of account opening Minimum amount per Rs.500/- Rs.250/- contribution Minimum contribution in a Rs.1000/- Rs.2,000/- financial year Minimum frequency of 1 1 contributions per financial year
Role of CSC under NPS To offer advice on NPS to the prospects and to facilitate opening of NPS accounts To disseminate information about NPS To accept contributions from subscribers and timely remit the same To accept service request from the subscriber and to act on them To redress the grievances of the subscribers To process exit and withdrawal request
• Citizen to visit any CSC & ask VLE to open a NPS account. • VLE login into his Digi Seva Portal & Click on NPS, Enter his Aadhaar no. & authenticate him through Aadhaar/eKYC option. • Enter the details like Nominee, Contribution amount, Choose Fund manager, upload his Signature and collect the contribution amount from the subscriber. • Pay the amount using the wallet, submit application and generate PRAN. • Take the print out of the form, get it signed by the subscriber & dispatch it to M/s Alankit Assignments Ltd, Alankit House, 4E/2, Jhandewalan Extension, New Delhi 110005 with in 3 working days.
Choice of PFMs 1. ICICI Pension Fund Management Company Limited 2. Kotak Mahindra Pension Fund Limited 3. Reliance Capital Pension Fund Limited 4. SBI Pension Fund Private Limited 5. UTI Retirement Solutions Limited 6. LIC pension Fund Limited 7. HDFC Pension Fund Manager Company Limited
Investment Option Subscriber decides allocation pattern amongst A, E, C & G Active Choice Asset Class Cap on Investment Alternative (A) 5% Equity (E) 50% Corporate Bonds (C) 100% Government Securities (G) 100% Funds managed on the pattern of a lifecycle fund Auto Choice Funds to be allocate in E, C & G as per the age of the Subscriber ❖ Investment Option can be changed once in a financial year
To Employers • Contributions made by the employer (upto 10% of Basic + DA) is allowed as a business expense under Section 36 (1) iv (a) of Income Tax Act 1961. To Employees • Employees own contribution is eligible for tax deduction under sec 80 CCD (1) of Income Tax Act up to 10% of salary (Basic + DA). This is within the overall ceiling of Rs. 1.50 Lacs under Sec. 80 CCE of the Income Tax Act. • Employee also gets tax deduction for the contribution made by the employer under section 80 CCD (2) of IT act upto 10% of salary (Basic + DA) which is in addition to the tax benefits available under Sec. 80 CCE. No Monetary ceiling. • Subscriber is allowed tax deduction in addition to the deduction allowed under Sec. 80CCD(1) for additional contribution in his NPS account subject to maximum of Rs. 50,000/- under sec. 80CCD 1(B). Exclusive to NPS
Interim Withdrawal ➢ Withdrawal will be allowed subject to ✓ Subscriber should be in NPS for 10 years ✓ Amount should not exceed 25% of the contributions made by the subscriber ✓ Withdrawal can happen only against specified reasons Withdrawal option are limited to ensure sufficient terminal corpus
Pre mature Retirement Vesting Criteria At any point in time before superannuation Conditions for Normal Retirement Withdrawal Vesting Criteria On attaining the superannuation Death of subscriber Vesting Criteria Death due to any cause
Vesting Criteria Benefit At any point in time before superannuation Compulsory Annuitisation- minimum 80% (allowed to subscriber who Lump sum withdrawal- maximum 20% have been in NPS for at least If Corpus< Rs. 1.00 Lac, complete withdrawal 10 years) Annuitisation- minimum 40% Lump sum withdrawal- maximum 60% If Corpus< Rs. 2.00 Lac, complete withdrawal On attaining the age of - Subscriber can stay invested in the NPS upto the age of 70 years. Fresh superannuation as prescribed contributions are allowed during such a period of deferment. in service rules) and upto 70 - Can defer the withdrawal of eligible lump sum amount till the age of 70 years of age years and withdraw the same in 10 annual instaments. -Annuity purchase can also be deferred for maximum period of 3 years at the time of exit. In such an unfortunate event, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. However, if the Death due to any cause nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure.
Exit Process RS. 20 40% for lacs Pension Corpus Monthly Pension of around Rs 11,883 * At the Rs.50 age of 60 lacs Lumpsum amount of Rs. 30 lacs 60% as RS. 30 lacs Lumpsum 80% for Pension Rs. 20 Corpus Monthly Pension of around Rs Rs. lacs 11,800 * At the Rs. 25 age of 50 lacs Lumpsum amount of Rs. 5 lacs 20% as RS. 5 Lumpsum lacs In Case of Death: Claimant will get full amount or as applicable for exit before the age of 60
Variants of Annuity Plans • Pension (Annuity) payable for life at a uniform rate to the annuitant only. • Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as you are alive. • Pension (Annuity) for life with return of purchase price on death of the annuitant (Policyholder). • Pension (Annuity) payable for life increasing at a simple rate of 3% p.a. • Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant. • Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant. • Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant and with return of purchase price on death of the spouse. If the spouse predeceases the annuitant, payment of annuity will cease after the death of the annuitant and purchase price is paid to the nominee.
Annuity Service Providers
Intermediary Charge Head Service Charge Method of Deduction Initial Subscriber Registration Rs. 125 Initial Contribution 0.25% Min: Rs. 20 & POP To be Collected Upfront Max : Rs.25,000 All Subsequent Contribution All Non-Financial Transaction Rs. 20 Earning : VLE will get 80% - TDS of above charges upfront
➢ Aadhaar Based Registration of Subscriber. ➢ Instant PRAN allotment ➢ No Paperwork for Subscribers. ➢ PRAN kit will be delivered to the subscriber within 30 days from NSDL. ➢ Direct contribution through Payment Gateway Service Provider (PGSP) by all existing Subscribers. Online Credentials will be in the PRAN Kit. ➢ Subsequent contribution by furnishing only PRAN Number to the VLE.
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