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:
Tier 1:
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)
Tier 2:
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.
Dipankar Dash says
I am dipankar dash working two years in private plant if will get the pension Rs 7000/- how much year i will continue to do. I will withdrw my amount is it possible then how. if a employ get pension monthly in a fixed amount then how much he will work in private sector & what is the proses.
Vivek says
I have identical problem. do tell me the solution once you know . thanks
Ganesh Kasab says
Dear sir,
After 3 years of my service in Govt. job, i have resined. I was under New pention Scheme there. Now i want to withdrawl my amount. kindly suggest me about the procedure.
thanks,
Ganesh.
ran singh says
hi, I worked in sbi for 10 month and resigned. They deducted about Rs. 2000/- pm against contributory pension. Am I eligible to get back my money. If it is, than what is the procedure to get back the money.
sanjay says
currently i am in govt job and i want to resign from this job to join other one but it will not be a technical resignation as its not possible…..will i get my contribution to nps tranferred in new job…..
V. Radhakrishnan says
Sir,
I have worked the Income tax department from Nov 2007 to jan 2009. I contribute to the New Pension Scheme to the above period. I want to get back the New Pension Scheme subscription.
What is the procedure. Kindly help me.
L.K.Chandrakar says
Sir, I have joined Doordarshan (Govt. organisation) on Jan. 2000 under Old Scheme(GPF). On 2004, i have joined Bhabha Atomic research Center under LIEN for 3 years, but by mistake they consider me under new pention scheme. After 3 years i back to my parent organisation i.e. doordarshan and continue with G.P.F. . now i want to withdrawl/ transfer my conribution under new pention scheme at B.A.R.C. but B.A.R.C. says we have no guidelines in this regard. kindly suggest me in this regard.
L.K.Chandrakar says
Dear sir,
After 3 years of my service in Govt. job, i have resined on Oct. 2007. I was under New pention Scheme there. Now i want to withdrawl my amount. kindly suggest me about the procedure.
rajiv jain says
i am also having the same contact,
after contacting they are telling application through proper channel for transfer of cpf to new pf account.
rajiv
Rajdeep Rakshit says
I am working in a school of private sector where no pension facility is given to the employees.That’s why I am looking for NPS.But the problem is that I am not getting an office where I can go and open my NPS account.I stay in Kalyani,Nadia,W.B where all the nationalised and private banks are there,along with the offices of UTI,Cams etc.But I am Not getting any guidance any where.Please guide me.
Pronab Biswas says
Out of the seven fund Pension fund managers as stated above, which on would be the best for choosing in the NPS and how????
RAJDEEP RAKSHIT says
but they are not abling to provide me any details…
narmada jakhar says
hello sir,
I am tgt in kv. i want to know wether the employer’s share in nps is included in the savings under 100000 rs. plz clarify the rules.
Anil says
I am retiring from state govt. Service. Where do I invest my total retirement recievable funds for tax free returns.
Anil
santanu sinha says
has the bill for NPS is passed in both the houses of parliament to make it a law of the land? if no, then how Government can compel a government staff to be part of the NPS (contribute) without a proper enacted law and if anything happens with the money how government can controll the fiasco?
varam says
hi my uncle is going to retire on mar 2012 ,he is central govt employee and coming under new pension scheme(appointed as ex-serviceman on 01 jan 2004) but still we have no any perfect idea about his pension and gratuity ammount
Rajinder Kumar Anand says
Hello Sir
Please Suggest me the PURE Benefits and Drawback of NPS
Myself, MANOJ BORSE from Surat – Gujarat [Basically Maharashtrian ]
I am 24 Years OLD Student pursuing MCA, interested in securing my future 😉
I am interested in opening such NPS account.
Could somebody explain me the process and also suggess me where do i get the details about the returns each scheme had given previously
Sathiamoorthy says
Happy Morning to all. I am a Central Government Employee covered under NPS, I want to know how an individual subscriber can exercise change in his investment option?
Ajit Kumar Singh says
Sir, I have joined in Central Para Militry Force on 18.02.2006 and subsquently resiged from service on 09.09.2009. My subscriptions through New Pension Scheme (10% of Pany Band +GP+DA) and 10% Govt. contributions has not been refunded so far. . I approached to my parent department, but they told ministry has not made any rules to refund the subscription under new pension scheme. Please clarify that how to get my subscription.
Thanks
sankalp srivastava says
Dear Frnd,
I have communicated through RTI in Ministery of Finance, and my parent department but till date all departments are throwing ball ot each other’s court for NPS refund
Ritesh Raj says
Sir, I was initially in Central Govt., where I joined in April, 2004. Again, I resigned myself from Central Govt. and joined in Indian Railway in Dec.2004. In the meanwhile, I again applied for another post in Indian Railway through Direct recruitment and got selected in 2011. But I did not applied through proper channel any time due to some reasons.
You are requested hereby that kindly give me the necessary informations that how my NPS amount will be treated and whether my new service may be effected due to changing of old NPS nos? Further if any rule, regarding merging of all NPS no. is available, if any, may please be intimated to me.
Sir, How the PRAN No. and NPS No. will be treated in changing of Govt. jobs. if a Govt. employee joins a new job after resigning old job in Govt. sector without giving technical resignation.
Ajit Kumar Singh says
Sir, I have joined in Central Para Militry Force on 18.02.2006 and subsquently resiged from service on 09.09.2009. My subscriptions through New Pension Scheme (10% of Pany Band +GP+DA) and 10% Govt. contributions has not been refunded so far. . I approached to my parent department, but they told ministry has not made any rules to refund the subscription under new pension scheme. Please clarify that how to get my subscription.
Thanks
Dr.Preeti says
I jam a central para military officer and the govt. part of my CPF contribution finds no mention on any salary slip but in my form 16 it is added on my income and the entire Rs.100000/- deduction has been taken up by the CPF amount.kindly guide me as to the tax liability of CPF.
dipankar phukan says
i resign from previous job in railway where my money is invested in nps. now i want to quit from this and get my money . what is the procedure for it.
prafulla says
Hi
I am a govt employee.
Previous to this I was working in another govt job. I resigned that job and joined the new one. I filled up PRAN form in my previous job. Also I hv filled up in the 2nd job. Will be two PRAN for me??
Harnarendar Singh says
I worked in BSNL for 9 years after that I resignd. I am not eligible to take Pension as minimum 10 years are required. Now I joined other Company where NPS is there (PRAN). Can I transfer my EPF amount to NPS (PRAN).
Shashi says
I’m a railway employee. I passed another railway in same post, can i fill up new form for PRAN or can i transfer old one? If transfer old one then tell me process?
Mrs ranganathan says
Can a person who is self-employed(age 46 yrs) and not earning more than 8000 rupees per month be able to benefit from this scheme or are there any other schemes for such persons?
gala panachand says
At which office should we contact in Mumbai, to personally interact and apprise the above facts ?
Pushp Raj Singh says
Dear sir
I have worked in central Govt Deptt since 12 years. My last pay was BP 13700 and GP was 4200 and now I have joined state govt as class II officer on two years lien form 2009. Now my queries are as under :-
1. Whether I am eligible for pension after completion of my lien period?
2. if yes, what was my pension amount?
3. Whether I will got regular DA on my pension?
4. Whether I will be treated as retired central Govt employee?
5. Whether my pension will affect my New job ?
kumar says
is there is any possibility to withdraw provident fund in early stages
Satish Ambhore says
Dear sir,
1.I have joined Central Govt as group C in September 2004 to Janeuary 2009.Later i got selectin in Indian Railways through UPSC ,but due to some technical reason I joined 27 february 2009. Is my previous contributions can be continue?
2.Is it possible to change from TIER I to TIER2?if yes what is the process?
Rabin Kumar Khandayatray says
Respected sir, I am working in private sector. What is the minimum amount to be invested per month in NPS scheme and I am elligible or not for the scheme. How can I know the detail information about this.
Rajesh Singh says
R/sir
I want to know about the % of amount that is likely to be given after retirement in cash . The amount which is kept to release as pension after retirement is to be teturned to the nominee or not. Suppose a person deposits 2000/- per month for 25 yerars how much he will gen in cash and how much as pension till he servies.
Anoop Kumar says
My age is 36 yrs. I want to contribute Rs 1500 per month in post Office’s NPS. What amount I will get monthly pension after the completion of my age 58 yrs. If I commute the 60% of amount then What is the commuted amount & what is the monthly pension at the age of 58 ?
Manoj Kumar says
Dear Sir,
Recently I have got a GOVT. job. I have a NPS account.
Previously I was working in private sectors. So I have EPF accounts in different companies. Is it possible to transfer all my EPF amount to my NPS account, TYRE-I type.
If yes please suggest me the procedure.
V Annadurai says
Sir,
pls give detail of NPS to open account & i am 41Years Old & i working in a private concern at time of 60(age) how much money i will get pension per month & how much money should i will pay every month up to at age of 60
Anushri says
Sir
I am 41 years old working in a private Engineering College,Nagpur.I want to open NPS account.What amount of monthly pension i will get if I start investing Rs 50000/-pa upto the age of 60 years.
sukhvinder singh says
plz tell me how much return in the shape of pension will be received on retirement in case of state govt.employee.reply with example plz.
Manoj Borse says
Hello….Sir
Please Suggest me the PURE Benefits and Drawback of NPS
Myself, MANOJ BORSE from Surat – Gujarat [Basically Maharashtrian ]
I am 24 Years OLD Student pursuing MCA, interested in securing my future 😉
I am interested in opening such NPS account.
Could somebody explain me the process and also suggess me where do i get the details about the returns each scheme had given previously
Thank You Very Much
~MANOJ
anugrah says
Hello Mam /Sir
I want to open an account of NPS.
Plz suggest me which plan is better for me .
I am 31 yrs old and my salary is 1.8 lcs per annum.I am in a private job.
plz suggest me.
thanking you
Regards,
Shiv Prakash Rai says
Hello Mam /Sir
I want to open an account of NPS.
Plz suggest me which plan is better for me .
I am 31 yrs old and my salary is 1.8 lcs per annum.I am in a private job.
plz suggest me.
thanking you
Regards,
Shiv Rai
Baikuntha Patra says
Sir,
Presently I am working in RelianceADA company.I have completed 8years
3 montha If Iam leaving the service will I get any Pension benifit.
Sreeraj says
Dear Mohan. I would like to open an account with SBI. Can you please help me to get the contact details / formats/ forms for it.
Rasmi says
Well If you look the performance of the TIER -1 of 2009-10, it is excellent. As I remember itis more than 20%. SO no need to worry. Go ahead and open an NPS account.
Aalok says
Hi
I am apprehensive that the AMC will not provide as good quality of Asset Mgmt for NPS money with them as they would for their products.
0.009% is too low. Awaiting comments
Aalok says
Hi Mohan
1. Is LIC an option for all or only for govt employees ?
2. Can I choose LIC as my POP and AMC ?
Abhinav Gupta says
Hi Mohan,
What is your take on NPS. Can you share your good and bad ” lists” for NPS. Should someone working in private sector go for it
Mohan says
Hi Abhinav, I will come up with that list soon in teh form of another article.
Yoosuf says
Hai, From where I can download / get the registration form. I found one in the Offer Document at PFRDA website, but it’s verry small fonts (not fillable)
Satish says
good Afternoon sir
Iam the govt employee in state governmet i want to contribute under NPS
Is it possible to invest plz reply me
pattu says
Ayyanagar, Mohan,
Sorry. I have to disagree. returns are not guaranteed in NPS. I am a govt employee and in my Tier I, only 15% is in Equity. I cant change it. Of course in Tier II its in my hand and I can have up to 50% equity.
My view is Govt limits exposure to equity since nothing is gauranteed in NPS
The earlier PF option is way way more safer. In that a govt employee remains an employee for life. Pensions will get DA enhancement periodically. In NPS all ties are severed at retirement with the govt and the annuity has to be got from SBI/LIC/UTI. As Shubra points out no one knows what the rates will be.
Sitesh says
Dude Indian govt can be related very similar to a private company now a days.
Indian govt is:
1) Of people
2) By People
3) For politician/Party
Someone said: Politics is a lucrative business. Think about it….
kanika gupta says
Is returns are guranteed in NPS scheme?
S.R.Ayyangar says
Even if the returns may not be as lucrative as in some other schemes, this one is safe bet for future.
Mohan says
Absolutely…!
Swaram says
Hmmm. My husband was talking about the ICICI Prudential one too.
Mohan says
Well, there is a catch. If you buy directly with private players, you will have too many charges associated. But with NPS, the fund management charges would be bare minimal.
vineeta says
One of my phone banker called me and told me to take any pension plan as goverment is going to change the policy and these plans will not be available for free! I did not understand him but I do not see any mention of it in ur post! Am i missing anything here?
Mohan says
Vineeta, probably he was talking about the new tax code which will be in place starting next financial year. Still it is under discussion and we will have more info only after sometime!
Srikanth says
HI Vineeta,
I want to invest in SBI Pension Plan, No wI heard that IRDA is changing the Policies Terms. This SBI Pensions Policy is available till Aug 31. I have got confusion on when to invest, i.e Now or after Aug 31. what would be the best choice?
Could you please suggest?
Regards,
Srikanth
Rajesh says
Hello Mohan. Thanks for the reply and the useful link. Being a bit of a internet freak myself, i went about digging deep into the subject topic and found out the necessary information before seeing your reply here! I came back to thank you for the information. Thanks!
Mohan says
You are most welcome!
Rajesh says
Hello. I checked with the PFRDA website and they said that this NPS scheme is extended to all the citizens of India irrespective of whether they hold a govt. job or not. I am not a govt. employee, yet i want to avail this scheme. Where do i apply?
Mohan says
Hi Rajesh, there are a number of service providers all over India operating through the so called PoP (Point of Presence), you can go through the list provided here.
Manab Dhar says
Hello Mr. Mohan,
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.
Mohan says
Dear Manab, please refer to IRDA documents for information on the fund performance.
Sunil says
I have a reverse question that Rajesh posted