New Pension Scheme is government of India initiative to extend pension benefits to citizens of India, at large. Any individual whether employed with private sector, self employed or professional can now avail of pension benefits and plan his/her retirement period well by enrolling in the New Pension Scheme (NPS).
One can regularly invest in this scheme and get a part in lump-sum on retirement and a fixed monthly income for the lifetime. NPS is based on a unique Individual Permanent Retirement Account Number (PRAN) created for individual subscribers. This number will remain the same for the subscriber’s lifetime irrespective of where he/she operates the NPS account from across the nation.
Currently, there are two plans under the NPS:
Tier 1 : Non withdrawal and tax deferred pension account (for all individuals)
Tier 2 : Withdrawal supported savings account without any tax advantages (for all individuals subjected to minimum deposits per year in Tier-1 account)
The subscriber also has to control on how his/her contributions(savings) are being managed by selecting a professional fund manager(PFM) from a pool of PFMs. Investor can either opt for Active Choice or Auto Choice. Under the Active mode, the subscriber can decide on proportion of investment to be made across different debt, equity and government securities. On the other hand, in the auto choice mode, the division across investments will be made by the authority based on subscriber age with equity allocation reducing as age increases.
There are 3 classes of investment to opt for in NPS, this is what they mean:
Class G : Investment would be in Government securities like Govt of India bonds and stage govt bonds.
Class C : Investment would be in fixed income securities other than govt securities
Class E : Investment would be primarily in equity market instruments. It would invest in Index funds that replicate the portfolio of either BSE Sensex or NSE Nifty 50 index.
However, the maximum exposure that can be taken in equity is up to 50%. With that the NPS subscriber can also select from the following seven pension fund managers (PFMs).
- SBI Pension Funds Pvt. Ltd
- UTI Retirement Solutions Ltd
- LIC Pension Fund Ltd
- IDFC Pension Fund Management Co Ltd
- Kotak Mahindra Pension Fund Ltd
- Reliance Capital Pension Fund Ltd
- ICICI Prudential Pension Funds Management Company Ltd
Contribution details under the NPS are as below:
Minimum # of contributions : 4
Minimum contribution : Rs 2000/- pa
Minium contribution : Rs 500 per contribution
(The amounts mentioned here have been further revised downwards by PFRDA)
Minimum contribution of Rs 1000 at the time of account opening
Minimum balance of Rs 2000 at the end of a financial year
Here is the list of documents that you need to open the NPS account:
2 copies of identity proof 2 copies of address proof Proof for Date of Birth Self declaration indicating that the applicant is not a pre-existing member of NPS Colored Passport size photograph For Tier 2 account, in addition to the above docs, you need to submit bank details and a cancelled cheque.
Exclusive benefits of NPS:
- Provides tax benefits under section 80C of income tax laws.
- Govt provided pension plan directly regulated by PFRDA.
- Portable plan, nation wide access to NPS over a period of time.
- Investment in NPS is highly safe and it contains very less amount of risk.
- NPS provides higher returns compared to other relative investment options
- Cost effective mode of retirement planning – cost structure is very efficient compared to that of the charges levied by mutual funds or other investment options.
In case of death due to any cause, the nominee will have the option to withdraw the proceeds in lump sum. Also, if the vesting age is less than 60 years, then 20% of the amount accumulated can be withdrawn and the balance 80% will have to be used to purchase annuity. On the other hand if the vesting age is 60 years or more but less than 70 years, then 60% of the amount can be withdrawn either as lump sum or in a phased manner between age 60 & 70. Balance 40% will have to be used to purchase annuity. If you are looking for safe returns at normal rate of growth towards pension, this scheme is for you! If you have more questions on your mind, feel free to visit this FAQ site of PFRDA.
Kapil Baro says
How2 check my pf blnce
Plz tll smthng
Gaurav agrawal says
Resignation 2 year back of 1 year services in central government .now in private sector how can refund my nps tier 1 money please guide
I resigned to my job in 2013 dec. And my investment nearly 1 lakh Rs. But my question is how to close and if I close what benefits are recieved.
Kindly guide me properly.
Thanking you sir.
I m govt. Employee but i want to leave my job after 4 years my question is know about nps how can i draw my deducted ammount under nps scheme and also how much time to get it and govt. Share include in it
Subhash Ch. Morang says
I worked for 1.6 years in railway under nps scheme.I resigned that job and showed my nps account Rs 48000. but I have not yet refunded now. How to get it?
Dilip Chanda says
Respected Sir/Madam my name is Dilip Chanda. Feb 26th 2015 i was submitted NPS Lite Scheme in guwahati office and money also actually sir in our state there is no NPS office so i am sending my form and money through another office. but sir its almost 2 month running what shall i do please suggest me i am help less. thank you
Mohan, can you help in understanding how to get tax benefit of 50,000 rupees from NPS as claimed in the latest budget?
sir, I worked in psu one year then join to govt. service. is uan no. get by psu used for pran? or is my pf account same for both?
Mariappan S says
I worked in BRO (GREF ) Since October 2004 to 2010. Then i resigned my job and I had received my PRAN no. How can I get my contribute amount
Rajesh Chauhan says
Sir i just resigned from Central Govt. Service please let me know that how i can withdraw the nps contribution amount.
I am an NRI. Am I eligible for the pension plan ?
Hi Jayaprakash, yes you are! If you had contributed towards NPS while you were on service in India, you certainly do qualify for it. You can find all the details about pension plans for NRI’s here on the govt page link.
chhotu ram rao says
Can i shift my nps acount into state govt job
Yes you can! please check with your employer.
shivani sharma says
sir i am a govt. employee. but want to leave my job after 3yrs… my question is know about nps… how can i withdraw my deducted amount under nps scheme…. pleas tell me the procedure of withdraw my deducted amount
R.C Paul says
Whether retirement gratuity is available to the NPS Account holders?
are govt.employee enrolled in new pension scmeme entitled for retirement gratuity/ death gratuity? if yes what is the criteria for calculation.
How can I claim NPS amount I have credited in case I resigned my present job
you can transfer your account to the new employer, if you are going for a new job, but if you are not going or any job than you can withdraw your amount by form no. 120-GP which should be send through your employer to NDSL. The details of NSDL is available in their site.
I am 35 year old nri and holding indian citizenship. I have a 2 year old disabled child. I would like to join in NPS(new pension scheme) if my child gets pension after me. Is it the same rules apply as govt employees who r having disabled kids? and is my child should be indian citizen too, to get be benefit?
Thank you for your response. I am searching for answer all over the net but no luck 🙁
Ramesh K Mandawat says
Sir, I have resigned from my sbi assitant service after doing job of 22 month .now i am doing iii grade govt tEACHER IN RAJ STATE GOVT .I want to take myn cpf back .please tell me the processure . i have been issued my pran no also .is it possible to use this pran no into my state govt job ?if not than what i have to do .
Dhananjaya D H says
I have resigned from state govt. service after doing 3 years,now i am doing job in Central Govt.I want to take my NPS amount to back or transfer, I doesn’t have pran no in the state govt service, at my present job i have issued pran no.
I asked in the Past Organization, they replied you are eligible for only Employees Share & you are not eligible for employers share, So Please Guide or give me valuable advice.
Respected Sir, i am a state government teacher and have sbi pran account,my question to you is if due to any reason i have to quit my job after like 3 years of service then ,will i be able to withdraw the amount form my pran.
Vishal Jawajala says
I am a govt servant and i am enrolled in NPS scheme , my question is that why the tire 1 account is non withdrawal account ,we belong to a middle class family where education is the must factor to earn good job or business if my children want to study and take higher qualification they need money for fees / donation for the same i have to take loan or borrow money from others, where as i already have a good amount in my savings . So whether it is right for the Common man.
M S Baig says
Dear Sir, i am currently working in a Central PSU where NPS scheme is in place. Here 10% of salary is being contributed (9% from employer side and 1% from employee side) towards the fund by each employee. I just want to know if i resign from service and Join any private job, can i continue the same pension policy by contributing the amount regularly or is there any other option as per rules of nps.
Iam a Govt. Servent. I Ask one question please answer me. Death of in service what is benifits of nps
umesh nagtode says
I have completed 9yrs 8 months If I am leaving this services will I get any pension benfit
Niren Joshi says
I want to just know that my age is 28 years and if i am investing 1,000/ p.m. in NPS for the age of 60 years. and my vesting age is also 60 year at the time what is the monthly pension’s amount which can i get.
I am enrolled in service at the age of 31. If iam investing 1500/- per month and the same amount by govt contribution,then what will be the maturity amount and monthly pension which i will get at the age of 60 years
Rajinder Anand says
My daughter is employed in private firm and wants to open NPS account. Pls guide me where she should open this account (Name of instituition) and with options beneficial to her. Will the pension granted after stipulated period include Dearness allownace from time to time granted to Central Government emloyees? How much pesnion will she get if she contributed Rs. 2,500 per month for 25 years?
Umesh Ragatsinge says
For 20 years i will paid 3000/- pm then how much i will get after Retirement pension
kishor Kumar says
Hi, i am 31 year old,if i paid 3000 p.m then how much i will get after Retirement.
Satishkumar PS says
Hi, I am 34 year old, if i pay 2500 pa then how much i will get after retirement
Parag Sharma says
Hi, i am 32 year old,if i paid 1000 p.m then how much i will get after Retirement.
What about NPS account of a govt employee if he quit his job?
Sanjib Kumar Sinha says
Hi,I m Sanjib kumar Sinha,I had worked in NF Railway from January,2006 to April 2010 and I also contributed in NPS tier -I but i had not received my PRAN No then.So can you suggest me how can i get my contribution.I have resigned on personal ground.
Dhananjaya D H says
I am Dhananjaya D H , I Had worked in SJIC ( state govt) from November2006 to Feb 2009 and I also contributed in NPS Tier-1 but i had not received my pran no. then i joined in esic ( central govt) please suggest me how can i get my contribution.
what about NPS account of govt. employee if quit his job
My age is 54 years i want to open an a/c in nps i can save Rs.2000/- per month for six years pl. tell me how much pention i can take after 60 years of my age.
s k shinde says
Sir My daughter is completing 18 yrs next month and she is just a student, i wish to open an a/c on her name and to invest on her name regularly or one time investment is it permitted ?
prahlad singh says
1. Will you please guide about the performance of the Fund Managers before I decide my choice of the Fund Manager for starting my NPS a/c.
2 Is returns are guranteed in NPS scheme?
1.Will you please guide about the performance of the Fund Managers before I decide my choice of the Fund Manager for starting my NPS a/c.
2 Is returns are guranteed in NPS scheme?