national pension scheme case study

National Pension Scheme 2023 (NPS) – Govt Approved Pension Scheme

National Pension Scheme or NPS scheme is an investment cum pension plan launched by the Indian Government. This scheme is regulated and administered by the Pension Fund Regulatory and Development Authority (PFRDA). National Pension Scheme is specifically launched by the Government of India to offer financial security to Indian senior citizens. NPS scheme provides impressive long-term savings options so that individuals can plan their retirement time efficiently by investing in this safe market-based plan.

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• National Pension Scheme (NPS)

• What is NPS?
• NPS Benefits
• NPS Returns
• NPS Tax Benefits

Features of NPS

• Fees and Applicable Charges of NPS
• Eligibility Criteria of NPS

Types of NPS Account

• NPS Fund Managers
• Difference Between NPS Tier-I And Tier-II
• Types of NPS Funds India

NPS Account for NRI

• Features & Benefits of NPS Account for NRI

How to Open an NPS Account

• Comparing NPS with Other Options
• Who Should Invest In NPS?
• NPS Calculator
• NPS Interest Rate

What is National Pension Scheme?

The National Pension Scheme, also known as National Pension System, is open to all employees from the public, private, and even the unorganized sectors except those who work in the Armed Forces. In the NPS scheme, the subscribers can make a minimum contribution of Rs. 6,000 in a financial year, which can be paid as a lump sum or as monthly instalments of a minimum of Rs. 500.

Minimum NPS Contributions

In the NPS scheme, the contribution of the subscribers is invested into the market-linked instruments like debt and equity and the returns depend on the performance of these investments. The current interest rate of NPS is 9% - 12% on the contribution made.

Any Indian citizen from the age group of 18 years to 60 years can open the National Pension Scheme account. Regulated by PFRDA, the National Pension Scheme matures at the age of 60 years and can be extended up to 70 years. The NPS scheme allows the subscribers to make partial withdrawals of up to 25% of the contribution after 3 years of opening the account in specific situations like purchasing a home, sponsoring a child's education, or for the treatment of any critical illnesses.

National Pension Scheme - NPS Benefits

The following are the benefits of the National Pension Scheme.

Returns/Interest

A portion of the contribution made towards the NPS scheme is invested in equities, which offer higher returns as compared to other traditional tax-saving investment options like PPF. With an interest rate of 9%-12%, this pension plan is best suitable for individuals who want to accumulate funds in the long term and have a financially secure life after retirement.

NPS Tax Benefit

This is another NPS benefit offered to the individuals. The contribution made towards the NPS scheme up to the maximum limit of Rs.1.5 lakhs is eligible for tax exemption under Section 80C of the Income Tax Act. Moreover, in the National Pension Scheme, the contribution made by the employer and the employee are both applicable for the tax exemption.

Premature Withdrawals and Exit Rules

As a pension plan, it is mandatory to invest in National Pension Scheme until 60 years of age. However, partial withdrawals are allowed after 3 years from the date of opening the account. The subscribers can withdraw up to 25% of the total contribution made. Premature withdrawal is only applicable in case of specific circumstances like sponsoring a child's education, purchasing a house, or in case of any medical emergency. The subscribers can make a withdrawal up to 3 times in the intervals of 5 years in the entire tenure. These rules are only applicable to the Tier I account and not on the Tier II accounts.

After 60 Withdrawals Rules

In the NPS scheme, the individual cannot withdraw the entire accumulated fund from the account after the retirement. In this scheme, it is mandatory to keep aside at least 40% of the accumulated fund to receive a regular annuity from the PFRDA registered insurance firm. The remaining 60% of the accumulated fund is tax-free.

Equity Allocation Rules

In NPS scheme, the investments are made into a different scheme. As per the equity allocation rule, the investors can allocate a maximum of 50% of their investment in equities. There are two options of investments available to invest in, i.e., active choice and auto choice. The active choice allows the investors to choose their fund and split the investment as per their risk appetite and suitability on the other hand, in auto choice the investment is made considering the risk profile and age of the investors.

Risk Assessment

Currently, on equity exposures of the NPS scheme, a cap between the range of 75% to 50% exists. For government employees, this cap is 50%. In the prescribed range, the equity portion will reduce by 2.5% every year starting from the year in which the investors will turn 50 years old. This balances the equation of risk-return for the investors that mean the invested fund is safe from the volatility of the equity market. This scheme offers a higher earning potential as compared to other fixed-income schemes.

It is Voluntary

In the NPS scheme, the subscriber can contribute anytime during a financial year and can also change the amount he/she wants to invest every year.

Offers Flexibility

National Pension Scheme offers flexibility as subscribers can choose their option of investment and pension fund and see their investment grow.

It is Simple

The subscribers can open the NPS account by visiting the website of eNPS(https://enps.nsld.com/eNPS/) or at any one of the Point of Presence (POP).

It is Regulated

The NPS scheme is regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). With regular monitoring and transparent investment norms, NPS offers transparency and reliability to the subscribers.

National Pension Scheme Returns

A national pension scheme does not have a fixed rate of interest, but the returns are based on the market performance of the funds as the investments are made in market-linked securities. The contribution made towards the NPS scheme can be invested in 4 different asset classes like equities, government bonds, corporate bonds, and alternative assets through different pension funds. The returns offered by these pension funds depend on the market performance of the stocks and bonds.

Best NPS Returns 2023

The National Pension Scheme is one of the most popular annuity products in the country. Investing in the NPS scheme not only provides an advantage to the investors over other fixed-income schemes but also offers the perk of tax exemption Under Section 80C and 80CCD of the Income Tax Act. It comes with a lock-in period till retirement, however, it allows premature withdrawals in specific circumstances. Under the National Pension Scheme details, the investors are also given the advantage to allocate their investment. Investors can choose the option to invest in funds either automatically or manually.

National Pension Scheme Tax Benefits

The National Pension System allows tax exemption on the contribution made towards the scheme up to the maximum limit of Rs. 1.5 lakh under section 80C of the Income Tax Act. Moreover, in the NPS scheme, the contribution made by the employer and the employee are both applicable for the tax exemption.

80CCD (1) - This is a part U/S 80 of self-contribution. The maximum deduction up to 10% of the salary can be claimed for tax exemption under this section. For the taxpayers who are self-employed, this limit is 20% of the gross income.

80CCD (2) - This section covers the contribution made by the employers towards the NPS scheme. This benefit does not apply to self-employed taxpayers. The maximum amount entitled to the tax exemption is the lowest of the: A. Actual NPS contribution by employer B. 10% of Basic + Dearness Allowance C. Gross total income.

You can claim any additional self contribution (up to Rs 50,000) under section 80CCD(1B) as National Pension Scheme (NPS) tax benefit.

As a government-sponsored pension scheme, here we have mentioned some of the National Pension Scheme details and some of the salient features of the NPS:

A portion of the national pension scheme goes into equities.

The returns offered by National Pension Scheme are much higher as compared to the traditional tax-saving investment instrument such as PPF.

Pension plan offers 9%-12% annualized returns.

In case, the individual is dissatisfied with the performance of the fund then he/she can change the fund manager.

Up to the maximum deduction of Rs. 1.5 lakh can be claimed in NPS under section 80C of the Income Tax Act.

For the Tier-I account, the subscribers are required to make a yearly contribution of Rs. 6,000 and Rs. 500 as a one-time contribution. For the Tier-II account, the subscribers are required to make a yearly contribution of Rs. 2000 and Rs. 250 one-time contribution.

One cannot withdrawal the entire corpus from the national pension scheme after retirement.

In NPS account one can only withdraw 60% of the fund after retirement and the rest 40% of the fund is invested in the pension scheme to receive a regular pension.

An individual can open an NPS account through the online or offline process.

One can make a withdrawal for up to 3 times within 5 years of intervals in the entire tenure.

After completion of 3 consecutive years of NPS account, one can make a withdrawal of up to 25% of the accumulated fund for a specific purpose such as medical treatment, higher education, marriage, buying a house, etc.

Fees and Applicable Charges of NPS Scheme

Eligibility Criteria of NPS Scheme

Any Indian citizen can open the NPS account .

The minimum age eligibility for opening the NPS account is 18 years whereas the maximum age limit for opening the NPS account is 65 years.

The applicant should be KYC compliant.

The applicant should both have any pre-existing NPS account.

There are two types of accounts that NPS offers:

Tier-I Account

It is a basic pension account with limitations on withdrawal 

Before attaining 60 years of age, only 25% of the contribution can be withdrawn while the rest 75% has to be necessarily used for buying the annuity from a life insurer. An annuity is a series of payments made at fixed intervals of time. Annuity plans necessitate the insurer to pay the insured income at regular intervals until his death or till maturity of the plan. 

After attaining the age of retirement also (60 years), close to 60% contribution can be withdrawn and the rest 40% again has to be used to purchase the annuity from approved life insurers.

Tier-II Account

It is a voluntary savings option from which a person can withdraw money limitless. 

National Pension Scheme Fund Managers

The individual/organization that takes decisions regarding any portfolio of investment (mostly a mutual fund, pension fund, or insurance fund), as per the stated goals of the fund. It is necessary to opt for a fund manager while opening the account.

The money is managed by seven fund managers appointed by the PFRDA. Following are the pension funds registered under the National Pension Scheme.

Pension Funds for Government Sectors

LIC Pension Fund Ltd.

SBI Pension Fund Pvt. Ltd.

UTI Retirement Solutions Ltd.

Pension Funds Other than Government Sectors

ICICI Prudential Pension Fund Management Co. Ltd.

HDFC Pension Management Co. Ltd

Kotak Mahindra Pension Fund Ltd.

Aditya Birla Sunlife Pension Management Ltd.

Tata Pension Management Ltd.

Max Life Pension Fund Management Ltd.

Axis Pension Fund Management Ltd.

Features of NPS Tier-1 and NPS Tier-2 account

Trending in pension plan Family Pension Scheme Corporate National Pension Scheme How To Get a Monthly Pension of Rs 10,000? National Social Assistance Programme (NSAP) Pradhan Mantri Kisan Samman Nidhi (PM KISAN) Life Annuity Plan Jeevan Pramaan RajSSP Viklang Pension Yojana Vridha Pension Elabharthi Top 15 Pension Plans in India NPS Tier 2 Account Advantages and Disadvantages NPS Calculator for Government Employees Post Office NPS Calculator 2023 NPS Interest Rate 2023 Employee Pension Scheme (EPS) NPS Calculator 2023

Difference Between NPS Tier-I And Tier-II Account

As National Pension Scheme allows individuals to make systematic investments, liquidity is never an issue. To enjoy liquidity benefits, the subscriber needs to have any of the below-mentioned accounts along with a unique Permanent Retirement Account Number (PRAN).

Functions as a pension account

Withdrawn are subject to specific restrictions

The account can be opened with a minimum deposit of 500 rupees

Functions as voluntary account

Offers liquidity of funds through investments and withdrawals

Account can be opened with a minimum deposit of 250 rupees

Tier-I account needs to be active to open a Tier-II account

Let us look at the table to understand Tier-I and Tier-II account of the National Pension Scheme better

This table gives you a wide idea as to how Tier-I and Tier-II account for National Pension Scheme works. Study the table carefully and make an informed decision.

*Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product by an insurer or any other financial product.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C applies.

Types of Funds in the National Pension Scheme in India

Depending on how open the investor is to risk, the corpus can be divided among these three fund classes. Exposure to equity cannot be more than 50%. However if the allocation is not specified, the exposure to various classes, especially equity is decided on the basis of age. 

The above figure also tells us about the average performance of National Pension Scheme funds in different classes.

The investment mix according to the age of the investor: 

So with increasing age, the investment corpus gets more inclined towards Debt

Non-Residential Indians (NRIs) can also open a National Pension Scheme account and can make full use of the benefits they carry. The NPS is a retirement savings scheme launched by the Government of India with an objective to secure the life of an individual financially after retirement. The eligibility criteria for NRIs who want to open an NPS account are.

The individual should age between 18 years -60 years.

The individual must complete the KYC norms.

OCIs and PIOs are not eligible.

The contribution towards the national pension scheme should come either from an NRE or NRO account.

Features and Benefits of National Pension Scheme Account for NRI

The investment portfolio of the NPS account is highly diversified and offers the flexibility to the investors to choose the ratio of funds that should be allotted across different investment options.

Investment can be made in different assets such as corporate bonds, equity, and government securities.

As per the risk appetite of the investor, up to 85% of the fund can be diverted to the corporate bond or equity or government securities.

NPS offers two types of investment options for NRIs:

Active Choice - the NRI investors can decide the ratio of investment and asset classes.

Auto Choice - Based on the age of the investor, the investment is done on behalf of the NRI investor.

Every subscriber is given PRAN card with 12-digit unique identification number.

The Pension Fund Regulatory and Development Authority of India regulates the operations of the National Pension Scheme. PFRDA offers both online and offline process to open an NPS account. The individuals can register and obtain the subscription for the NPS scheme through the online platform of eNPS or the offline process. Let's take a look at how to open an NPS account.

Online Process

An individual can now open an NPS account in a simple and hassle-free way. To open an NPS account online, it is important to link the account to the PAN, Aadhaar, and mobile number.  Let’s take a look at the steps to open the NPS account online. 

Go to the website of enps.nsdl.com.

Choose the type of subscribers from the available option' corporate subscriber' and 'individual subscriber'.

Choose the appropriate residential status. The option includes “ India Citizens” and “NRI”.

Select for either Tier I account type or both the accounts as it is mandatory for long-term savings.

Enter the PAN details and choose a suitable POP or bank.

Click on the registration and choose the option of ‘register with Aadhaar’.

Enter the Aadhaar number and click on the option of ‘generate OTP (One Time Password)’.

An OTP will be sent to the registered mobile number.

Enter the OTP along with personal information, bank details, and nomination details.

Once the application form is successfully submitted, the Permanent Retirement Allotment Number (PRAN) will be allotted to the applicant.

Once the individual submits the e-signature and photograph and OTP will be sent to the registered mobile number.

Enter the OTP to verify the signature and make payment.

Once directed to the payment gateway, process to make payment of the required charges via net banking.

Once the payment is done successfully, the permanent retirement account number will be generated

Offline Process

To open the NPS account manually or offline, the individual will require finding Point of The individual will require collecting the subscriber form from the nearest PoP and submitting it along with the completed KYC papers. Once the individual makes the initial investment, the point of presence will send you a Permanent Retirement Account Number (PRAN). The PRAN number and password in the sealed welcome kit will help the individual to operate the account. The offline process to open the NPS account includes one-time registration fees of Rs.125.

While this is the process of registration for the National Pension Scheme for all subscribers, the NRIs need to complete a few additional steps to complete the process.

Choose the status of the bank account i.e. repatriable or non- repatriable.

Provide the details of the NRE or NRO bank account along with a scanned copy of the passport.

Choose an appropriate communication address i.e either overseas address or permanent address.

Once the permanent retirement account number (PRAN) is allotted the applicant will need to proceed further for the authentication.

For the e-sign option, the applicant will need to choose the option of e-sign from the E-sign/ print & courier page.

Authenticate with OTP sent on the registered mobile number. Note that the number should be linked with your Aadhaar Card.

After Aadhaar authentication, the registration form is successfully signed.

It is important to note that a service charge is applicable for NRIs for E-signing the registration form.

Comparing NPS with Other Tax Saving Investment Options

Besides NPS, the other popular tax saving investment instruments available in the market U/S 80C are Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), and tax-saving fixed deposits (FDs). Let’s take a look at the comparison between NPS and other tax-saving instruments.

The NPS can earn higher returns as compared to PPF and FDs, however, it is not as tax-effective on maturity as compared to other investment options. For example, the subscribers can withdraw 60% of the accumulated fund from the NPS account on maturity. However, out of this 60%, 20% is taxable. The taxability on NPS scheme withdrawals is subject to change.

Who Should Invest in NPS scheme?

Any individual aged between 18 years and 60 years can open the National Pension Scheme Account.

National Pension Scheme is best suited for individuals who are unable to decide their asset allocations or do not have time to manage their investment.

An NPS is a completely government-backed scheme and any person who wants to plan their early retirement and does not wish to take high-risks should undoubtedly go for it.

A salaried person who wants to take the best advantage of 80C deductions, should consider National Pension Scheme.

Eligibility Criteria

A person planning to retire should go for NPS scheme. The following person can buy National Pension Scheme

Any India residing citizen can open the NPS account

The minimum age eligibility for opening the NPS account is 18 years whereas the maximum age limit is 65 years

The applicant should be KYC compliant

The applicant should not have any pre-existing NPS account

National Pension Scheme Calculator

National Pension Scheme calculator allows the subscriber to compute the provisional lump-sum and pension amount.

At the time of retirement based on the monthly contributions, a subscriber can expect:

The annuity purchased

The expected rate of returns on investments

The annuity

Who Can Use NPS Calculator?

As per National Pension Scheme rules, any individual aged between 18 years and 60 years can open the National Pension Scheme Account, and hence can use NPS Calculator .

How To Use NPS Calculator?

To use the National Pension Scheme calculator, you have to follow these simple steps:

Step 1: Enter the amount to be invested every month

Step 2: Enter your present age

Step 3: Use the slider to select the expected rate of return

Step 4: Get results within seconds

Note that, National Pension Scheme calculator illustrates tentative pension amounts and does not guarantee exact numbers.

Monthly Investment

Expected Return on Investment

Percentage of Corpus Allocated for Pension

Expected Return from Pension

National Pension Scheme Interest Rate

National Pension Scheme offers a current interest rate of 9% - 12% depending on the subscribers and type of scheme.

National Pension System offers different options of investment to the subscribers and also provides them the option to choose the fund managers as per their choice. Depending on the scheme chosen by the investors NPS offers an interest rate of up to 9%-12% as compared to other investment instruments.

NPS Withdrawals

The withdrawal of the accumulated fund from the NPS account is allowed at the age of 60. However, NPS also offers the facility of premature withdrawals in certain conditions. Let’s take a look at the withdrawal process of NPS.

NPS Withdrawal on 60 Years

In the case of maturity of the scheme in 60 years, the subscribers can withdraw 60% of the accumulated corpus from the NPS account, whereas, the rest 40% of the accumulated amount is used to purchase the annuity. The subscribers will need to provide the withdrawal details and bank account to the aggregator to Upload the information to the CRA system for execution.

NPS Withdrawal Before 60 Years

As a pension scheme, it is compulsory to invest in NPS until 60 years of age. However, partial withdrawals are applicable after completion of 3 years from the date of opening the account. The subscribers can withdraw up to 25% of the total contribution made. Premature withdrawal is only applicable in case of specific circumstances like sponsoring a child’s education, purchasing a house, or in case of any medical emergency. The subscribers can make a withdrawal up to 3 times in the intervals of 5 years in the entire tenure. These rules are only applicable to the Tier I account and not on the Tier II accounts.

NPS Withdrawal on Death of the Subscribers

In case of the demise of the subscribers, the entire accumulated corpus is transferred to the beneficiary or the legal heirs. The beneficiary or the legal heir will have to contact the aggregator with the required documents like identity proof of the beneficiary, death certificate, etc. for the withdrawal of the fund.

Types of Withdrawal Forms Available

The following is the list of different forms available for different categories of withdrawal requests.

NPS Withdrawal Forms on Superannuation

NPS Withdrawal Forms Before Superannuation

NPS Withdrawal Form For Claimants on Demise of the Subscriber

National Pension Scheme FAQ's

Q: can i have two nps accounts, q: how can a subscriber contribute to nps, q: can a subscriber make contributions in his / her nps account before receipt of the pran card, q: who is eligible for national pension scheme, q: what is the lock-in period for the national pension scheme (nps), q: how can i join the national pension scheme.

• The prerequisite to join NPS is Permanent Retirement Account Number (PRAN). One can get the forms for PRAN from any of the presence service providers (POP-SP) under the National Pension Scheme.
• Then the details of the applicant, preferred National Pension Scheme details, and details of the bank have to be filled in the application form. ID and address proof, photograph for the KYC should be attached in the application form.
• An applicant should submit this form with all the required documents at the office of the POPSP. The PRAN is generated and issued to the address of the applicant soon after verification and processing of this form.
• When an applicant is submitting the form, he/she has to contribute at least Rs.500 to the POP-SP. For the same, the applicant has to fill a contribution slip (NCIS) with the particulars of the payment instrument with the payment.

Q: Can I transfer my NPS account?

Q: what are the tax benefits of the national pension scheme, q: how can i pay nps online.

• Enter the PRAN number.
• Select the type of account.
• Select the category of the account.
• Enter the payment amount.
• Click ‘Submit’.
• Check the online reference number or PRAN, email id, mobile number, and email id.
• If all the information is correct, click ‘Pay Now’.

Q: What is NPS scheme and benefits?

Q: which scheme of nps is the best.

Best Performing Tier-I Returns under Scheme E – 2023

Best Performing Tier-II Returns under Scheme E – 2023

Q: Is NPS a good scheme?

Q: what is nps interest rate, q: is nps tax-free on maturity.

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• National Pension Scheme

“Shukriya” (“Thank You”)

The people working in the Financial Services sector at all levels, from the Ministry down to the last village level Business Correspondent, have helped transform this sector over the past 75 years. During Covid, this sector did not shut down. The people in Financial Services were as much front-line workers as any other sector, in the fight against Covid. The people of this sector deserve our collective gratitude. This music/video is addressed to them, and captures this sentiment.

For registration under NPS you may contact the nearest UTI branch office or Click to download the application form and Contribution deposit slip.

Common Application Form  

Additional Contribution Slip

National Pension System (NPS) is a ‘Government of India’ initiative with an objective of Development of a sustainable and efficient voluntary defined contribution Pension System in India. It is regulated by Pension Fund Regulatory and Development Authority (PFRDA).

NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under NPS, the individual contributes to his retirement account and also his employer can also co-contribute (under Corporate tie-up) for the social security/welfare of the individual. NPS is designed on  Defined Contribution  basis wherein the subscriber contributes to his / her account. The  savings create a Retirement Corpus (Pension Wealth) through the baskets of investments i.e. Equity (E), Corporate Bonds (C)  Govt. Securities (G) and Alternate Assets (A)  commonly known as E, C ,G and A.

NPS can be joined by any citizen of India, whether Resident or Non-Resident between 18-65 years of age.  There are two models under which an Individual can register himself in NPS and take the benefits of the scheme.

• i. NPS All Citizen’s Model : The Individual can join and take the tax benefit of maximum up to Rs.50,000 in a financial year under Income Tax Act (Sec 80 CCD(1B)). For registration, the applicant should comply with the Know Your Customer (KYC) norms. All the documents required for KYC compliance need to be mandatorily submitted at the time of registration.
• ii. NPS Corporate Model: NPS Corporate Model provides a platform for the employers (PSU’s, Private Companies ) to co-contribute for the pension to their employee with the flexibility in the amount of contribution from employee/employer. The NPS Corporate model can be introduced along with any other retirement benefit schemes like Employee Provident Fund and Superannuation Fund . The portability feature of NPS is best suited for the employees of Corporate Sector, where the employment change is frequent.  Under Corporate model additional tax benefit upto 10% of Basic+DA can be availed in a year under Income Tax Act (Section 80 CCD (2).

The tax rebate applicable in above points (i) and (ii) are over and above the existing standard deductions under IT Sec 80CCE limit of 1.5 Lakhs.

Click here to receive more details on this .

Types of NPS Account: Tier-I account:   All the tax benefits discussed in above points are over and above the existing standard deductions under IT Sec 80 CCE limit of 1.5 Lakhs and are only available under the NPS Tier 1 account.

Tier-II account:   This is a voluntary savings facility. The applicant will be free to withdraw his savings from this account whenever he wishes to. This is a not a retirement account and the applicant cannot claim any tax benefits against contributions to this account.

NPS gives you the undernoted unique advantages which will help you built the best possible retirement corpus:-

• 1. Additional Tax Deduction: NPS provides an opportunity of extra tax savings

i)    Employer’s Contribution: Deductible up to 10% of salary (Basic + DA) as additional deduction under section 80CCD(2). It has no upper cap on the amount

ii)    Employee’s Contribution: Opportunity of extra tax savings under Sec 80 CCD (1B) up to Rs.50,000/- 

The tax rebate applicable in above points (i) and (ii) are over and above the existing standard deductions under IT Sec 80CCE limit of 1.5 lakhs

• 2. Lower Expense Ratio: NPS is perhaps the world’s lowest cost pension scheme. The total recurring expenses inclusive of the Fund Management fee and all other handling and administrative charges would work out to be around to 0.21% p.a.  The lower expense ratio would lead to HIGHER RETIREMENT CORPUS
• 3. Ensures Complete Portability:  NPS account can be operated from anywhere country irrespective of employment and geography
• 4. Tax Efficient: NPS is now 100% tax efficient. The subscriber can now withdraw the 60% of the corpus without paying any tax
• 5. Flexibility:  Subscribers have  - 
•                      i) Choice of Pension Fund managers (PFMs)
•                     ii) Choice of Investment mix
•                    iii) Choice of Life Cycle Fund is also available

The process for enrolling in NPS is very simple. If you are an individual between 18 years to 65 years you can register either by downloading the forms available under the section ‘ Invest in NPS’  and submit it to the nearest UTI Branch office

The registration form is also readily available at all the UTI branch offices. You may visit the nearest UTI branch for additional information on NPS.

You will be required to undergo the following steps:

A.Fill up the NPS Application form with Black INK and deposit it along with the Additional Contribution Slip form to the nearest UTI  Branch office

B. Documents to be attached along with the NPS Application Form            (i)   One colour photograph to be pasted on the Application Form           (ii)  Proof of Address (AADHAAR Card/ Bank passbook/ Voter ID/ Passport etc.)          (iii) Identity Proof (PAN Card/ Driving License/ Passport)          (iv) Contribution cheque drawn in favour of "UTI AMC Collection Account - NPS Trust"

NPS is superior to other perceived Retirement plans because of the following reasons:

The additional tax benefits which can be availed in addition to the existing standard Income Tax deduction u/s 80CCE. The tax rebate under u/s 80CCD(1B) and under u/s 80 CCD(2) are over and above the 1.5 lakhs limit under u/s 80 CCE

NPS is having the lowest expense ratio as compared to any other retirement plan

The only available retirement plan which has the flexibility of :

           a.Choosing the Asset allocation between Equity, Corporate Bonds, Government Security and Asset class

           b.Choosing Pension Fund Managers (PFM) as per the performance and the services offered from the current list of 8 PFMs

       iv. The biggest feature of NPS being its prime objective of creating a corpus for Retirement which remains intact even after retirement. The annualized returns on the corpus yields the returns which are paid as monthly pension

        v . NPS is not only tax efficient during the working age but also even after retirement

NPS is a long term retirement savings scheme which builds up the pension wealth through effective investments of the subscriber contributions over the term of the subscriber’s continuation in the scheme. The greater the value of the contributions made, greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, the larger would be the eventual benefit of the accumulated pension wealth likely to be. The subscriber can exit from NPS and withdraw the accumulated pension wealth in the following manner and no other exits or withdrawals are permitted:

For subscribers joining between 18-60 years:

• a. Upon attainment of age of 60 years: At least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance (60%) is paid as a lump sum payment to the subscriber. If the total corpus is not exceeding Rs. 2 lacs, then the subscriber has the option to withdraw the whole corpus in lumpsum.
• b. Upon Death (irrespective of cause): The entire accumulated pension wealth (100%) would be paid to the nominee / legal heir of the subscriber and there would not be any purchase of annuity/monthly pension. The nominee, if so wishes, has the option to purchase annuity of the total corpus.
• c. Exit from NPS before attainment of age of 60 years (irrespective of cause): At least 80% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance (20%) is paid as a lump sum payment to the subscriber. If the total corpus is not exceeding Rs. 1 lac, then the subscriber has the option to withdraw the whole corpus in lumpsum. Subscriber can exit from NPS only after completion of minimum 10 years in NPS.

For subscribers joining between 60-65 years: The exit conditions for subscribers joining the NPS beyond the age of 60 years in the NPS –Private Sector will be as under:

• a. Normal exit: The subscriber exiting after completion of 3 years from the date of joining NPS. In the normal exit, the subscriber will be required to annuitize at least 40% of the corpus for purchase of annuity and the remaining corpus can be withdrawn in lump sum. In case the accumulated corpus at the time of exit is equal or less than Rs. 2 lacs, the subscriber will have the option to withdraw the entire corpus in lump sum.
• b. Premature Exit: Any exit before completion of 3 years will be treated as premature exit. In such case, the subscriber will be required to annuitize at least 80% of the corpus for purchase of annuity and the remaining corpus can be withdrawn in lump sum. In case the accumulated corpus at the time of exit is equal or less than Rs. 1 lac , the subscriber will have the option to withdraw the entire corpus in lump sum.
• c. Exit due to the death of the subscriber : The entire corpus shall be payable to the nominee of the subscriber.

The subscribers would be able to purchase the annuities directly from the empanelled Annuity Service Providers (ASP) as per their choice of annuity that is available in the market/with the ASPs.

Tax free partial withdrawals are allowed after vesting age which is up to 25% of self contribution. One can withdraw for 3 times during entire tenure for meeting specific financial needs (children education / marriage / purchase of house/medical treatment/skill development).

The Pension to be earned at retirement will depend on your invested amount, years of investment done, interest earned on the corpus and the percent of Annuity availed on the corpus. Click  on the Pension Calculator to know your pension amount.

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• FAQs for Corporate (English)
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If you have any feedback / suggestion / complaint / query, please Click here   For further clarification and assistance, please contact any of our  branch offices  across India or email us at  [email protected]  You can also visit the website of PFRDA and NPS Trust. For any grievances email us at  [email protected]

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• by clicking the "Accept" button I will be redirected to the website of a Central Recordkeeping Agency (CRA) appointed by PFRDA.
• that this link is provided only for the convenience of NPS Subscribers.
• that UTI Asset Management Company neither has any control nor endorses the content in the CRA's website.
• that the use of CRA's website would be subject to the terms and conditions of usage as stipulated in the CRA's website.

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National Pension Scheme

National Pension Scheme (NPS), a government-sponsored pension scheme, was launched in January 2004 for government employees. It was opened to all sections in 2009. A subscriber can contribute regularly in a pension account during her working life, withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement.

Top Performing NPS Schemes

By trailing returns.

• Scheme Name
• Return Rating
• Risk Rating
• Birla Sun life Pension - Scheme Tax Saver - TIER II
• HDFC Pension Fund - Scheme Tax Saver - TIER II
• Birla Sun Life Pension Scheme - Scheme G - TIER I
• Birla Sun Life Pension Scheme - Scheme G - TIER II
• LIC Pension Fund - Scheme Tax Saver - TIER II

Most Consistent NPS Schemes

• AUM (Rs. Cr)
• Consistency
• ICICI Prudential Pension Fund - Scheme A - TIER I
• Tata Pension Management Limited - Scheme E - TIER II
• Tata Pension Management Limited - Scheme C - TIER II
• Tata Pension Management Limited - Scheme G - TIER II
• Tata Pension Management Limited - Scheme Tax Saver - TIER II

Category Average Returns

• Category Name
• Quartely Category Discrete Returns
• Yearly Category Discrete Returns
• Scheme G TIER I
• Scheme G TIER II
• Scheme Tax Saver TIER II
• Scheme - Central Govt
• Scheme - State Govt

FAQs on NPS

What is national pension system (nps) ›, who can join nps ›, can a non resident indian (nri) join nps ›, how do i join nps ›, how can i find pops near me ›, what are the documents needed for opening an nps account ›, what is a permanent retirement account number (pran) ›, what are tier-i and tier-ii accounts ›, can i have more than one nps account ›, what is the minimum contribution in nps ›, what will happen if i don't make the minimum contribution ›, will the government also contribute to my nps account ›, who manages the money invested in nps ›, what are the investment choices available in nps ›.

• 1. Active Choice: This option allows the investor to decide how the money should be invested in different assets.
• 2. Auto choice or lifecycle fund: This is the default option which invests money automatically in line with the age of the subscriber.

What are the investment options available under Active Choice? ›

Can i change my investment choices ›, can i change my scheme and pension fund managers ›, can i have different pension fund managers and investment option for tier i and tier ii account ›, what are the tax benefits available for nps ›.

• 1. An employee's own contribution is eligible for a tax deduction --up to 10 per cent of the salary (basic plus DA) - under Section 80CCD(1)
• 1. of the Income Tax Act within the overall ceiling of Rs 1.5 lakh allowed under Section 80C and Section 80CCE.
• The employer's contribution to NPS is exempted under Section 80CCD
• 2. Moreover, individuals can claim an additional deduction of up to Rs 50,000 under Section 80CCD (1B), which is in addition to Rs 1.5 lakh permitted under Section 80C.
• 3. A self-employed person can also contribute 10 per cent of his gross income under Section 80CCD (1) in NPS.

When can I withdraw money from NPS? ›

Can i defer withdrawing the lumpsum amount at 60 ›, what if i want to take the money out before i am 60 ›, what happens to the money if i discontinue the scheme ›, what happens if the subscriber dies before 60 years ›, how do i withdraw the money from nps ›, what are the documents to be submitted along with withdrawal forms ›.

• 1. PRAN card (original)
• 2. Attested copy of proof of identity
• 3. Attested copy of proof of address
• 4. A cancelled cheque

What is an annuity? ›

Who are the annuity service providers ›.

• 1. Life Insurance Corporation of India
• 2. SBI Life Insurance
• 3. ICICI Prudential Life Insurance
• 4. Bajaj Allianz Life Insurance
• 5. Star Union Dai-ichi Life Insurance
• 6. Reliance Life Insurance
• 7. HDFC Standard Life Insurance

What are the different annuity options offered by ASPs? ›

• 1. Pension (annuity) payable for life at a uniform rate to the subscriber
• 2. Pension (annuity) payable for 5, 10, 20 years certain and thereafter as long as you are alive
• 3. Pension (annuity) for life with return of purchase price on death of the subscriber
• 4. Pension (annuity) payable for life increasing at a simple rate of 3 per cent
• 5. Pension (annuity) for life with a provision of 50 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber
• 6. Pension (annuity) for life with a provision of 100 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber
• 7. Pension (annuity) for life with a provision of 100 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber and with return of purchase price on death of the spouse.

How is the annuity income taxed? ›

All about nps.

How your salary perks, NPS investments can cut tax outgo by Rs 1 lakh

Sudhir Kaushik of Taxspanner.com tells readers how they can optimise their tax by rejigging their income and investments.

How NPS, home loan can cut tax outgo to zero

Ppf to nps: 7 tax-saving schemes for retail investors to opt for before march 31.

The current fiscal year ends on March 31, providing the last chance to save tax. Section 80C allows you to claim up to Rs 1.5 lakh deductions in the Old Tax Regime. So, explore these investment options under the old tax regime to save taxes.PPF to NPS: 7 tax-saving schemes for retail investors to opt for before March 31

Tax-savings from National Pension System: NPS investment proof documents to submit to claim tax benefit

The National Pension System (NPS) is a defined contribution, voluntary retirement savings plan. Subscribers to the National Pension Plan (NPS) are entitled for tax breaks.

How to use NPS to reduce your tax outgo

Tax planning: use your perks, nps cut tax by rs 1.4 lakh, charges of nps services: check details, use nps, perks to reduce income tax by rs 34,000; here's how.

Income Tax optimiser: Sudhir Kaushik of Taxspanner.com tells readers how they can optimise their tax by rejigging their income and investments.

9 tax saving investment options for FY 2022-2023

The last date to complete tax savings for current financial year is March 31, 2023. If an individual opts for old tax regime in FY 2022-23, then ensure that you have made specified investments under section 80C to save tax. Here are 9 tax saving investment options for FY 2022-23.

All you need to know about National Pension System (NPS) and its tax benefits

StockHolding is the recipient of the best POP (Point of Presence) award in various categories and it provides a 360-degree insight into people looking to begin their NPS journey.

What are the advantages of investing in NPS? Deepak Mohanty answers

See NPS if I have to put the non-government sector, during the last financial year that 2022-23, we crossed the landmark of 10 lakhs which is the corporate sector.

Tax optimiser: Kulshreshta can yse LTA, NPS to cut tax by Rs 1 lakh

Who can you add as a nominee for your nps account.

NPS subscribers should keep in mind that they should only nominate certain individuals to their NPS account. If you name the wrong nominee, the election may be null and void.

NPS contributions: Will NPS account be closed if minimum contributions are missed?

Nps scorecard: 10 fund managers & how they help you save on taxes.

National Pension System (NPS) helps you to save tax in several ways. There are only ten NPS fund managers at present and the table below compares their performance. The data has been provided exclusively to ET.

New vs old tax regime: How to choose income tax regime for TDS on salary for FY 2023-24

In the month of April, a salaried employee is required to communicate about the preferred tax regime option to their employers. As Budget 2023, has announced many changes under the income tax laws. This makes it important for salaried employees to analyse both the income tax regime and then communicate the same to the employer.

ET Awards 2022: Returning to Old Pension Scheme is almost impossible, says FM Sitharaman

Minister of Finance and Corporate Affairs Nirmala Sitharaman in a fireside chat with Bodhisatva Ganguli, Editorial Director of The Economic Times, at the ET Awards for Corporate Excellence 2023, said returning to the old pension scheme (OPS) “is probably going to be extremely impossible” because of the long-term burden of this move on the finances of those states that want to shift from the new pension scheme (NPS).ET Awards 2022: Returning to Old Pension Scheme is almost impossible, says FM Sitharaman

Tax optimiser: NPS, rent to father can help Kumar save Rs 1 lakh tax

Nps rule change from april 1, 2023: you will have to mandatorily upload these documents for withdrawal from nps.

In order to speed up and simplify annuity payments after leaving the National Pension System, the Pension Fund Regulatory and Development Authority (PFRDA) has demanded that subscribers upload specific papers as of April 1, 2023. (NPS).

Mixed show for formal job creation in February

While net additions to the Employees' Provident Fund Organisation increased, new subscriptions to the Employees' State Insurance Corporation and National Pension Scheme declined.

Data Sources: Mutual Funds, ETFs, and NPS data are sourced from Value Research

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National Pension Scheme

Topics Covered:

• Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

What to study?

For Prelims: Key features, objectives of the scheme.

For Mains: Significance of the scheme and its role in ensuring financial security of the citizens.

Context : Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enrol in National Pension Scheme (NPS) at par with Non-Resident Indians.

What is National Pension System (NPS)?

• It is  a government-sponsored pension scheme. It was launched in January 2004 for government employees. However, in 2009, it was opened to all sections.
• The scheme allows subscribers to contribute regularly in a pension account during their working life. On retirement, subscribers can withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement.
• This system is  managed by PFRDA (Pension Fund Regulatory and Development Authority).

Who can join NPS?

• Any Indian citizen between 18 and 65 years can join NPS.
• An NRI can join NPS. However, the account will be closed if there is a change in the citizenship status of the NRI.
• Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.

Sources: the Hindu.

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National Pension Scheme

• Features Benefits

National Pension Scheme (NPS)

Secure income for your old age with this investment tool that offers market-based returns

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Are you a subscriber interested in undergoing online training on NPS/APY, if so please Click here

National Pension System (formerly known as National Pension Scheme) is an investment cum pension scheme initiated by Government of India to provide old age security and pension to all citizens of India. It is an investment tool that provides market –based returns. Since it offers exposure to both debt and equity instruments, NPS offers attractive returns over the long term. Other advantages of NPS include additional tax benefits and the option to invest, check scheme details and transfer funds online. Axis Bank has been appointed by PFRDA to acts as one of the Points of Presence (POP) for NPS.

There are two models available under NPS :

• All Citizen Model- Available to all citizens of India
• Corporate Sector Model- Provide NPS benefits to the employee of corporate entities

Secure Income for Old Age

Choice of investment models, two account options, dual benefit for investors.

• Benefits for you
• Check your eligibility
• Got a query?

Features & Benefits of National Pension System (NPS)

Ensure income security in your old age.

• Low cost of investment
• Prudently regulated by PFRDA
• Choice of funds, fund managers and investment options
• Exclusive Tax Benefit
• Increase / decrease the investment amount for the year
• Select different asset allocation, scheme preference and pension fund manager for Tier I and Tier II accounts
• Nominate different nominees for their Tier I and Tier II accounts

All Citizens Model

This model is applicable to all Citizens of India and NRIs falling between the age group of 18 years to 70 years. Under NPS, two types of accounts are available to the subscriber - Tier I and Tier II. The contributions in Tier I account are savings for retirement and are non-withdrawable. Tier II account is a voluntary saving account.

Corporate Sector Model

The scheme features are common as in All Citizen Model. The differentiating features are as listed below:

• Corporate may join NPS through MOUs with any one of our existing authorized branches
• The employees will come under NPS within the purview of employer-employee relationship
• Corporates can co-contribute for employees’ pension, select PFM for its employees
• Employer can claim tax benefit for the amount contributed towards pension of employees’ upto 10% of salary (Basic+DA) under ‘Business Expense’
• Employees contribution is eligible for tax exemption as per the Income Tax Act, 1961
• Additional deduction for investments up to Rs 50,000 can also be availed
• Under the Corporate plan, registered employees (subscriber) have individual PRAN, portability across employment, sector and geography

Contribution

To know more please, Click here For Contribution .

Scheme Preference

To know more please click here For Scheme Preference

To know more please, Click Here To know more about Scheme Preference

Withdrawals

Tier 1 - The applicant shall contribute his/her savings for retirement into this restricted withdrawable account. This is the retirement account and applicant can claim tax benefits against the contributions made subject to the Income Tax rules in force.

Tier 2 –  Opening of this account is optional for investment purpose. The subscriber has the flexibility to can withdraw from this account as per their requirements 

**Failing minimum investment criteria leads to freezing of PRAN account as per the guidelines of PFRDA

NPS offers Subscribers two approaches to invest their money:

Active Choice:

• Under this option, Subscribers are free to allocate the investment across three asset classes as per their choice
• Maximum allocation to asset class E is restricted to 75%.

Auto Choice

• Under this option, investment across three funds (E, C and G) is made as per the pre-defined pattern known as life - cycle fund. 8 fund managers are registered with PFRDA to manage the investment portfolio of NPS Subscribers.
• Kotak Mahindra Pension Fund Limited
• ICICI Prudential Pension Funds Management Company Limited
• LIC Pension Fund Limited
• SBI Pension Funds Private Limited
• UTI Retirement Solutions Limited
• Reliance Capital Pension Fund Limited
• HDFC Pension Management Company Limited
• Birla Sunlife Asset Management Company Limited

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National pension scheme

What you need to know.

Plan for your retirement now, so you can enjoy your life later. Build a secure financial future with the national pension scheme, which ensures your money is invested safely and with reasonable market returns.

What is the national pension scheme?

NPS is a Defined Contribution-based Investment Scheme launched by the Government of India for all Indian citizens (including NRI) in the age group of 18–60 years. Upon joining, an NPS Account is opened for the subscriber, and a unique Permanent Retirement Account Number (PRAN) is issued by the Government of India to each subscriber. Subscriber contributes to the NPS Account periodically until the age of 60 years and uses the accumulations (Pension Wealth) at retirement for getting a Pension. The scheme is regulated by Pension Fund Regulatory & Development Authority (PFRDA).

Benefits of the plan

Tax exemptions on your contribution will apply as per NPS rules.

You can check the value of your investment on a daily basis.

It’s simple to join —all you need to do is open an account.

Your account is always yours and goes with you if you change jobs.

How the plan works

You can contribute up to 10% of your basic salary to your national pension scheme account. You can also contribute an additional INR 50,000 into your account to help your pension grow faster. 

Vesting age and payable benefits

Provider contact information

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Case study: E.On empowered by national pension scheme

E.On is a diverse business with a long history of mergers and acquisitions. In the UK, most staff belong to one of three pension plans: career average and final salary arrangements that are closed to new staff, and an open defined contribution (DC) plan.

Ant Donaldson, senior specialist, employee benefits at E.On, says harmonising pensions was helped by the fact that the whole industry is part of the national Electricity Supply Pension Scheme (ESPS), a final salary scheme. “Whenever there is a merger or acquisition involving ESPS members, they are generally moved from one section of the ESPS to another,” he says.

Eight years ago, E.On closed membership of ESPS to new joiners and set up its own career average pension scheme. This was subsequently closed to new members two years ago, when E.On launched a contract-based DC scheme.

There have been some acquisitions that fell outside ESPS. “We have allowed schemes to run on where we felt this was the most sensible course of action,” says Donaldson. “Where appropriate, we have offered members of those schemes the choice to move to whichever of our main three plans was open at the time.”

Read more case studies

Healthcare Research 2011: Package

Jelf employee benefits research: employers unaware of removal of the default retirement age’s impact on pensions, case study: ice engineers dc pension membership rise, news alanysis: rising cost of workplace depression, case study: bae systems reshapes bonus scheme, glaxosmithkline plant employees strike after rejecting 6% pay deal, 4most employee trust makes significant payout to invested staff, liverpool and knowsley councils commit to real living wage for care workers, exclusive: 33% of staff motivated by gift card rewards.

Spouse entitlements.I note that very little has been done to. bring in line these payments. My wife will receive 57.5% of my pension,and yet another wife is only in receipt of 50%of her late husbands pension.Both men were in the employ of EEBoard for well over 35years Yet nothing has changed,Surely something could still be done to rectify the situation by now.

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