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NEW PENSION SYSTEM (NPS)



https://www.centralbankofindia.co.in/site/MainSite.aspx?status=B1&menu_id=51

This link is from CBI.  scheme will be same in other banks also.   


NEW PENSION SYSTEM (NPS)                                               
(Pension nahin yeh PRAN hai)

Central bank of India has entered into an agreement with PFRDA (Pension Fund Regulatory and Development Authority) for functioning as one of the PoP (Point of Presence) for their New Pension System (NPS). Our Bank has designated 1006 Branches to function as Point of Presence- Service Providers (PoP-SPs) for handling NPS accounts.

Main Features and Architecture of the New Pension Scheme

New Pension System(NPS) for all Citizens was introduced  by GOI and managed by  the Pension Fund Regulatory and Development Authority(PFRDA), the regulator of pension fund in our country,  to secure the old age income by way of giving an annuity i.e. pension, once the subscriber(s) attains the age of 60.

NPS is a voluntary scheme of Pension System of PFRDA (Pension Fund Regulatory and Development Authority) open to all citizens in the age group of 18-60 years.
  • The Scheme is operative from 01.05.2009.
  • The objective is to provide old age pension with market driven returns over long term
  • Bank's designated branches i.e. Point of Presence-Service Provider (POP-SPs) accept the application form and get the subscriber(s) registered with Central Record keeping Agency (CRA) for generation of the Permanent Retirement Account Number (PRAN). 
  • The PRAN will be quoted in all future transactions.
  • There are two types of account i.e. Tier I and Tier II
  • Tier-I account is where subscriber(s) can contribute their savings for retirement into a non-withdrawable account till they reach 60 years and draw pension for the rest of their life.
  • In case of Tier I
          1. Minimum contribution at the time of account opening -Rs.500/-
          2. Minimum amount per contribution - Rs. 500/-
          3. Minimum Account Balance at the end of FY - Rs. 6000/-
          4. Minimum number of contributions in a year - 1
  • The subscriber(s) can exit the scheme after attaining 60 years of age. He/She has to compulsorily annuitize 40% of the accumulated pension wealth. Option to annuitize 100 % of the corpus is also available. 
  • Tier-II account is a voluntary savings account form which subscriber(s) are free to withdraw their savings whenever they wish.
  • The facility of Tier II account is being offered from December 1, 2009 to all citizens of India including Government employees mandatorily covered by NPS.
  • The Tier-II would enable the existing Permanent Retirement Account (PRA) holders to build savings through investments over and above those in the Tier I pension account. An active Tier I account will be a pre-requisite for opening of a Tier II account. 
  • No additional CRA charges would be levied for account opening and annual maintenance in respect of Tier II. However, CRA will charge separately for each transaction in Tier II, the charges being identical to the transaction charge structure in Tier I
  • There are no limits on number of withdrawals in Tier II. 
  • There is facility for separate nomination and scheme preference in Tier I and Tier II.
  • There is facility of one-way transfer of savings from Tier II to Tier I.
  • Bank details will be mandatory for opening a Tier II account. 
  • No separate KYC for Tier II account opening will be required; the only requirement is a pre existing Tier I account. 
  • In case of Tier II,
         i) Minimum contribution at the time of account opening -Rs.1000/-
         ii) Minimum amount per contribution - Rs. 250/-
        iii) Minimum Account Balance at the end of FY-Rs. 2000/- 
        iv) Minimum number of contributions in a year - 1
  • In case of Composite Application for Tier I and Tier II both, Minimum contribution at the time of account opening is Rs. 1500/-.
  • The Subscriber(s) will be informed of the Permanent Retirement Account Number (PRAN) by theCRA. Once the CRA provides the PRAN, the subscriber(s) can start depositing his subscriptions through his chosen POP-SP. 
  • The CRA keeps a record of all subscriptions.
  • A subscriber(s) has three options for his investments(Active choice):
Ø  HIGH RISK HIGH RETURN(Asset Class E): Investments in predominantly Equity Market Instruments

Ø  MEDIUM RISK MEDIUM RETURN (Asset Class c): Investment in debt securities other than Government Securities.

Ø  LOW RISK LOW RETURN (Asset Class G): Investments in Government Securities.
  • A subscriber(s) opting for Active choice may select the available asset classes "E", "G", & "C".However the sum of percentage allocation across all the selected asset classes must equal 100.Allocation under Equity (E) cannot exceed 50%
  • Subscriber(s) can also opt for Auto choice* -lifecycle Fund who do not have the required knowledge to manage their NPS investments. With this option, the system will decide on a mix of investments among the three asset classes, based on the age of the investor. In this option, the investments will be made in a life cycle fund. Here, the percentage of funds invested across three asset classes will be determined by a pre defined portfolio. At the lowest age of entry (18 years), the auto choice will entail investment of 50% of pension wealth in "E" Class, 30% in "C" Class and 20% in "G" Class. These ratios of investment will remain fixed for all contributions until the participant reaches the age of 36. From age 36 onwards, the weight in "E" and "C" asset class will decrease annually and the weight in "G" class will increase annually till it reaches 10% in "E",10% in "C" and 80% in "G" class at age 55.



Table for Lifecycle Fund

Age
Asset Class E
Asset Class C
Asset Class G
Up to 35 years
50%
30%
20%
36 Years
48%
29%
23%
37 Years
46%
28%
26%
38 Years
44%
27%
29%
39 Years
42%
26%
32%
40 Years
40%
25%
35%
41 Years
38%
24%
38%
42 Years
36%
23%
41%
43 Years
34%
22%
44%
44 Years
32%
21%
47%
45 Years
30%
20%
50%
46 Years
28%
19%
53%
47 Years
26%
18%
56%
48 Years
24%
17%
59%
49 Years
22%
16%
62%
50 Years
20%
15%
65%
51 Years
18%
14%
68%
52 Years
16%
13%
71%
53 Years
14%
12%
74%
54 Years
12%
11%
77%
55 Years and above
10%
10%
80%
In case of Auto Choice, reallocation among the asset classes shall take place based on the date of birth of the subscriber(s).

  • Net Asset Value (NAV) will be released on a regular basis so that subscriber(s) may be able to take informed decisions.

Neither the Active Choice nor the Auto Choice provides assured returns.
  • The 06 PFMs are:
1.    ICICI Prudentitial Pension Funds Management Company Limited
2.    IDFC Pension Fund Management Company Limited
3.    Kotak Mahindra Pension Fund Limited
4.    Reliance Capital Pension Fund Limited
5.    SBI Pension Fund Private Limited
6.    UTI Retirement Solutions Limited

 Swavalamban Scheme benefits for NPS Account Holders:
"Central Bank of India has been de-registered as an Aggregator under NPS Lite / Swavalamban scheme by PFRDA with immediate effect."


To know more or to open an NPS account, please walk into any of the designated branches. If you have any queries, please write to us at:-
Assistant General Manager
Government Business Department
Central Office, MMO Building
2nd Floor, M G Road, Fort
Mumbai-400023
email:agmgovtbusi@centralbank.co.in Fax: 022-22621712 or call at 18002001911(TOLL FREE).
You may also access the details of the scheme at http://www.pfrda.org.in orhttp://www.npscra@nsdl.co.in

 Most Important Terms & Conditions(MITC)

1.    The New Pension System (NPS) is a scheme run by the Government of India and our Bank is one of the agents authorized to accept contribution and assist in opening accounts. THE RETURNS IN THIS SCHEME ARE ENTIRELY MARKET DRIVEN.

2.    For NPS account opening, subscriber(S) should be in the age group of 18-60 years. 

3.    As per KYC norms Photo Id proof, Date of birth proof and Address proof are required to be submitted along with application form

4.    In case of Tier I:
I)            Minimum contribution at the time of account opening -Rs.500/-
II)         Minimum amount per contribution - Rs. 500/-
III)       Minimum Account Balance at the end of FY - Rs. 6000/-
IV)        Minimum number of contributions in a year - 1

5.    In case of Tier II:
I)            Minimum contribution at the time of account opening -Rs.1000/-
II)         Minimum amount per contribution - Rs. 250/-
III)       Minimum Account Balance at the end of FY-Rs. 2000/-
IV)        Minimum number of contributions in a year - 1

6.    An active Tier I account will be a pre-requisite for activation of a Tier II account.
7.    In case of Composite Application for Tier I and Tier II both,
    Minimum contribution at the time of account opening is Rs.
    1500/-.
8.    In case of Tier II or Composite application, a cancelled
    cheque is also required to be submitted along with the
    application form.

9.    Following costs are to be borne by the Subscriber(s) at the time of registration and/or performing any transaction. The contribution will be remitted, net of bank charges.

  • An Initial subscriber(s) registration charge of Rs.100/- and an ad valorem transaction charge of 0.25% of the initial contribution amount from Subscriber(s) subject to a minimum of Rs.20 and a maximum of Rs. 25,000/-. Plus applicable service tax.
  • Any subsequent transaction involving contribution upload - 0.25% of the amount subscribed by the NPS subscriber(s), subject to minimum of Rs.20/- and a maximum of Rs. 25000/-. Plus applicable service tax.
  • Any other transaction not involving a contribution from subscriber(s) - Rs 20/- Plus applicable service tax.

10. Subscriber(s) can register only through Bank's designated branches i.e. Point of Presence-Service Provider (POP-SP). 

11. Exit from New pension System (NPS):-
  • At any point in time before 60 years of age: Subscriber(s) would be required to invest at least 80% of the pension wealth to purchase a life  time annuity from any IRDA - regulated life insurance company. Rest 20% of the pension wealth may be withdrawn as lump sum.
  • On attaining the Age of 60 years and up to 70 years of age: At exit subscriber(s) would be required to invest minimum 40% of their accumulated savings (pension wealth) to purchase a life time annuity from any IRDA-regulated life insurance company. Subscriber(s) may choose to purchase an annuity for an amount greater than 40%. The remaining pension wealth can either be withdrawn in a lump sum  or in a phased manner, between age 60 and 70, at the option of the subscriber(s).
  • Death due to any cause: In such an unfortunate event, option is available to the nominee to receive 100% of the NPS pension wealth in lump sum. However, if the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure.       
NEW PENSION SYSTEM (NPS) Reviewed by sambasivan srinivasan on 11:38:00 AM Rating: 5

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