• What is the National Pension System?

NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings
account. Under the NPS, the individual contributes to his retirement account and also his
employer can also co-contribute for the social security/welfare of the individual. NPS is
designed on Defined contribution basis wherein the subscriber contributes to his / her
account, there is no defined benefit that would be available at the time of exit from the system
and the accumulated wealth depends on the contributions made and the income generated
from investment of such wealth.

The greater the value of the contributions made, the 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.

Contributions + Investment Growth – Charges = Accumulated Pension Wealth

• What is NPS Corporate Model?

PFRDA has launched a separate model to provide NPS to the employees of corporate entities,
Central Public Sector Enterprises and Public Sector Undertakings. This model is known as
“NPS - Corporate Sector Model”.

• What are the benefits to the employees in this model?

i. Cheapest investment product with better growth options through long term market-
linked returns.
ii. Provides choice of various funds with a flexible investment pattern.
iii. Individual Retirement Account for record keeping at individual level ensures
portability across geographies and employment.
iv. Employee’s as well as Employer’s contribution towards the NPS account of
employee is eligible for tax exemption as per the Income Tax Act, 1961 as amended
from time to time.
v. Offers Tier II account which is a voluntary savings facility with anytime
liquidity/withdrawal option.
vi. Efficient grievance management
vii. Routine/quarterly disclosure of the funds helps subscriber to achieve better
fund management.
viii. Auto Choice option for those who do not have the required knowledge to manage
their investment.
ix. An option to remain invested even after retirement (deferred withdrawal option
is available)

• What are the features of the retirement account provided under NPS?
The following are the most prominent features of the retirement account under NPS:
• Every individual subscriber is issued a Permanent Retirement Account Number
(PRAN) card and has a 12-digit unique number. In case of the card being lost or stolen,
 the same can be reprinted with additional charges.
• Under NPS account, two types of accounts – Tier I & II are provided. Tier I account is
mandatory and the subscriber has option to opt for Tier II account opening and
operation. The following are the salient features of the Tier-I and Tier-II accounts:
➢ Tier-I account: This is a restricted and conditional withdrawable retirement
account which can be withdrawn only upon meeting the exit conditions
prescribed under NPS.
➢ Tier-II account: This is a voluntary savings facility available as an add-on to
any Tier-1 account holder. Subscribers will be free to withdraw their savings
from this account whenever they wish.
• What are the minimum contributions to Tier I and Tier II account?

For Corporate model Tier I Tier II

Minimum Contribution at the time of account
Rs. 500 Rs. 1000
Opening
Minimum amount per contribution Rs. 500 Rs. 250
Minimum total contribution in the year Rs. 1000 -
Minimum frequency of contributions 1 per year -

• What happens to the investments if contribution is discontinued, or

minimum contribution is not met?

If contribution is discontinued and the subscriber wishes to exit from NPS before attaining
the superannuation, he/she can withdraw upto 20% of the sum accumulated till that point of
time. The subscriber has to buy annuity with the rest of the money from PFRDA empaneled
Annuity Service Providers. The subscriber can exit only if he has been in NPS for more than
10 years. If minimum contributions are not made as stipulated, the account will be frozen
and can be reactivated by paying the minimum contribution of Rs. 500/-.

• Can I appoint nominees for the NPS Tier I Account?

Yes, you need to appoint a nominee at the time of opening of a NPS account in the prescribed
section of the opening form. You can appoint up to 3 nominees for your NPS Tier I account.
In such a case you are required to specify the percentage of your saving that you wish to
allocate to each nominee. The share percentage across all nominees should collectively
aggregate to 100%.

• I have not made any nomination at the time of registration. Can I nominate
subsequently? What is the process?

If you have not made the nomination to your NPS account at the time of registration, you can
do the same after the allotment of PRAN. You will have to visit your POP and place Service
Request to update nominations details.

• Can I change the Nominees for my NPS Accounts?

Yes. You can change the nominees in your NPS Tier I account at any time after you have
received your PRAN.
• Are there any charges for making a nomination?
If you are making the nomination at the time of registering for PRAN, no charges will be levied
to you. However, a subsequent request for nomination updation would be considered as a
service request and you will be charged an amount of Rs. 20/- plus applicable service tax for
each request.

• In what way is the NPS Portable?

The following are the portability features associated with NPS

• NPS account can be operated from anywhere in the country irrespective of individual
employment and location/geography.
• Subscribers can shift from Corporate (employer) to another Corporate (employer),
from one sector to another like Private to Government or vice versa or All Citizen
Model to Corporate Model and vice versa. Hence a subscriber can move to Central
Government, State Government etc. with the same account. Also, subscriber can shift
within sector like from one POP to another POP and from one POP-SP to another POP-
SP. Likewise, an employee who leaves the employment to become a self-employed can
continue with his/her individual contributions. If he/she enters re-employment,
he/she may continue to contribute, and his/her employer may also contribute and so
on.
• The subscriber can contribute to NPS from any of the POP/ POP-SP despite not being
registered with them and from anywhere in India.

• Can I have more than one NPS account?

No, multiple NPS accounts for a single individual are not allowed and there is no necessity
also as the NPS is fully portable across sectors and locations.

• What are the tax benefits to the employees?

➢ Tax benefit to employee:

Employee’s contribution – Eligible for tax deduction upto 10% of Salary (Basic + DA) under
sec 80 CCD (1) within the overall ceiling of Rs. 1.50 Lac under Sec. 80 CCE.

Additional tax benefit on contribution upto Rs. 50000/- is allowed under Section 80CCD(1b)
of Income Tax Act, 1961. This is over and above the tax deduction available under Section 80
CCE.

Employer’s contribution – Eligible for tax deduction upto 10% of Salary (Basic + DA)
contributed by employer under sec 80 CCD (2) which shall be excluded from the limit of Rs.
1.50 lac provided under Sec. 80 CCE.
• What benefits would the family of employee get when the employee covered under
NPS expire during the service?

In such an unfortunate event, the nominee will receive 100% of the NPS pension wealth in
lump sum.

• Who can select the Investment option? Employee or Employer?

There is flexibility to select scheme and Pension Fund either at corporate level or Subscriber
Level. Corporate may opt for Pension Fund and investment choice or leave the option to
employees. In Xebia, we have given this option to employees.

• How are the funds contributed by the subscribers managed under NPS?
The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund
(PFs) as per the investment guidelines provided by PFRDA. The investment guidelines are
framed in such a manner that there is minimal impact on the subscribers’ contributions even
if there is a market downturn by a judicious mix of investment instruments like Government
securities, corporate bonds and Equities. At present there are 11 Pension Fund Managers
(PFMs) who manage the subscriber funds at the option of the subscriber.

At present, Subscriber has option to select any one of the following eight pension funds:

• Maxlife Pension Fund Management Ltd.

• Axis Pension Fund Management Ltd.
• DSP Pension Fund Manager Pvt. Ltd.
• Tata Pension Management Ltd.
• ICICI Prudential Pension Fund
• LIC Pension Fund Ltd
• Kotak Mahindra Pension Fund
• SBI Pension Fund Pvt. Ltd.
• UTI Retirement Solutions Pension Fund
• HDFC Pension Management Company Ltd
• Aditya Birla Sun life Pension Management Ltd.
However, this list may undergo changes if new pension fund managers are registered by
PFRDA, or existing players are de-registered by PFRDA.
• What are the different Fund Management Schemes available to the subscriber?

The NPS offers two approaches to invest subscriber’s money:

• Active choice: Here the individual would decide on the asset classes in which the
contributed funds are to be invested and their percentages (Asset class E, Asset Class C, Asset
Class G and asset Class A).

• Auto choice: Subscriber has the choice of three lifecycle funds i.e Aggressive Life
Cycle Fund (LC75), Moderate Life Cycle Fund (LC50) and Conservative Life Cycle Funds
(LC25). Under lifecycle funds, the management of investment of funds is done automatically
based on the age of the subscriber.

Moderate Lifecycle Fund (LC50) - This is the default option under NPS For full details,
one may go through our website www.pfrda.org.in wherein the full details of the
investment choices and fund management details are provided.

• Whether Pension Fund once selected be changed?

Yes, the Pension Fund can be changed once in a financial year.

• Can I have a different Pension Fund and Investment Option for my Tier I and Tier II account?

Yes. You may select different PFs and Investment Options for your NPS Tier I and Tier II
accounts.
• When an employee leaves the job, what would happen to PRAN a/c?

Employees can shift the corpus to new employer with same PRAN a/c if the new employer
is already a registered entity under NPS. But if not, then employees can continue the PRAN
a/c under All Citizen Model.

• In case if any employee resigns or leaves the organization within 5 years, can the
employer contribution be forfeited?

The employer contributions cannot be forfeited under NPS.

• What are the benefits offered under NPS and when they can be withdrawn?

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, the 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:

Retirement / Superannuation age of corporate subscriber (employee) is decided by the

Corporate (employer).

For subscribers joining between 18-60 years

a. Upon attainment of superannuation: 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 does not exceed Rs. 5 lacs, then the
subscriber has the option to withdraw the whole corpus in lump sum.

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 superannuation (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 does not exceed Rs. 2.5 lacs, then the subscriber has the option to withdraw
the whole corpus in lump sum. Subscribers can exit from NPS only after completion
of a minimum of 5 years in NPS.

For subscribers joining between 60-70 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 exits 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.
2.5 lacs, 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 empaneled
Annuity Service Providers as per their choice of annuity that is available in the
market/with the ASPs.

• Who are the Annuity Service Providers under NPS and their names?

Indian Life Insurance companies who are licensed by Insurance Regulatory and Development
Authority (IRDA) are empaneled by PFRDA to act as Annuity Service Providers to provide annuity
services to the subscribers of NPS. Currently, the following are the ASPs are empaneled by PFRDA
and the empanelment process is an ongoing process and the list of ASPs may increase in future.
1. Life Insurance Corporation of India
2. SBI Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Co. Ltd.
4. Kotak Mahindra Life Insurance Company Ltd.
5. Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited
6. Bajaj Allianz Life Insurance Company Limited
7. Edelweiss Tokio Life Insurance Co. Ltd.
8. Shriram Life Insurance Co. Ltd.
9. India First Life Insurance Company Limited
10. Max Life Insurance Company Limited
11. Tata AIA Life Insurance Company Ltd
12. PNB MetLife India Insurance Co. Ltd
13. Aditya Birla Sun Life Insurance Co. Ltd
14. Star Union Dai-ichi Life Insurance Co. Ltd.
15. HDFC Standard Life Insurance Co. Ltd

• What is an annuity and what are the different types of annuities providing for monthly
pension available to the subscribers of NPS?
An annuity is a financial instrument which provides for a guaranteed payment on
monthly/quarterly/annual basis for the chosen period for a given purchase price or pension
wealth. In simple terms it is a financial instrument which offers monthly/quarterly/annual
pension at a guaranteed rate for the period you choose. Currently, only the registered life
insurers offer the annuities in the Indian Market. Annuity Service Providers provide the
following type of annuities to the subscribers of NPS and subject to the conditions like
stipulated minimum corpus, age at entry etc.
 1. Pension (Annuity) payable for life at a uniform rate to the annuitant only.
2. Pension (Annuity) payable for 5, 10, 15 or 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
annuitant (Policyholder).
4. Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
5. Pension (Annuity) for life with a provision of 50% of the annuity payable to
spouse during his/her lifetime on death of the annuitant.
6. Pension (Annuity) for life with a provision of 100% of the annuity payable to
spouse during his/her lifetime on death of the annuitant.
7. Pension (Annuity) for life with a provision of 100% of the annuity payable to
spouse during his/her lifetime on death of the annuitant and the return of the
purchase price to the nominee.

Subscribers can opt for any of the above annuity variant at the time of exit.

• Where can I submit my withdrawal request and what are the documents required to
be submitted?
The withdrawal request seeking exit from NPS in the permissible manner can be submitted
to the employer / Point of Presence associated with the Corporate.

• To whom the claim for withdrawal of benefits needs to be submitted?

Corporate subscribers have to submit their request through their current employer / POPs.

• How the annuity OR monthly pension is paid

Monthly pension /Annuity will be paid through direct bank transfer to the specified
subscribers’ bank account only.

• Whether KYC compliance is required for employee and employer separately?

KYC compliance is mandatory for registration of employees as well as employer.

How to opt for NPS in DKM portal:

Home FBP Declaration NPS (1-10% of Basic Salary)

When to opt for NPS: Twice in a year

1. April Month (New FY. Starts)

2. Next month of PMS/ Salary Revision

What is the process of registration of employee’s corporates NPS?

For New Subscriber NPS Registration - Form required plus KYC documents:

1. Subscriber Registration Form Sample_ New Registration NPS FORM.PDF

2. Below KYC documents required:

PRAN Number: New Registration

• New Registration Form
• PAN card (Mandatory)
• Signed Printed Cancelled Cheque leaf (In
case name is not printed on cheque – attach
self-attested bank statement along with it)
• Address Proof – Voter ID/ Passport/ Driving
License

For Existing Subscriber (Transfer Request)- Form required plus KYC documents:

1. Inter_Sector_Shifting(ISS)Form-Bank_detail_as_per_CSRF 1.4 Inter_Sector_Shifting(ISS)Form-_1.4_

SAMPLE.pdf

2. ICSS Form ICSS Form.pdf

3. Below KYC documents required:

Existing NPS Subscriber

• Inter sector Shifting (ISS-1) form
• ICSS form (In case employee has PRAN with
Karvy/ KFintech)
• Self-attested copy of PAN Card
• Self-attested copy of PRAN Card
• Self-attested copy of statement downloaded
from NSDL/ Karvy website

Please note: fill in the required forms & share the signed scanned copies along with documents mentioned above for
validation at [email protected] & [email protected]

Once verified by DKM team, please share the documents self-attested (Manual Signatures Required) and share it at
Xebia Gurgaon Office address: 4th Floor, Capital Cyberscape, Golf Course Ext Rd, Sector 59, Gurugram, Haryana
122005.