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NPS(National Pension System)

Features of NPS
• Government has introduced w.e.f. 1.12004 a Defined Contribution based
Pension System known as the National Pension System (NPS) replacing the
existing system of Defined Benefit Pension.
• The National Pension System (NPS) is administered and regulated by
Pension Fund Regulatory and Development Authority (PFRDA) set up under
PFRDA Act, 2013.
• PFRDA is an Authority set up by the Government of India through the
PFRDA Act, 2013 to promote old age income security by establishing, regulating
and developing pension funds to protect the interest of Subscribers
• National Pension System (NPS) is a contributory pension system whereby
contributions from subscribers along with matching contributions from
respective governments as an employer, are collected and accumulated in an
individual pension account of the employee.
• NPS is market linked.
• Under NPS, a unique Permanent Retirement Account Number (PRAN) is
generated and maintained by the Central Recordkeeping Agency (CRA) for
individual subscriber.
 NPS is mandatory for all State Government Employees who have joined
services on or after 1st January, 2005.(1.1.2004 for Central Govt. employee) in
regular pensionable establishment.
 Also applicable to Contractual Employees.
 Not applicable to employee of Indian Armed Force.
 Unique and Portable PRAN
 Tire-I & Tire –II accounts
 Multiple fund & scheme option.
 Annuity at Retirement & pension from PFRDA/IRDA registered entities.
 DTI is the nodal office of PFRDA in respect of State Govt employees & is
registered with CRA(Central Record Keeping Agency).
 DTI is responsible for registration of Autonomous bodies including PSUs
who are willing to join NPS framework.
 Subscribers,DDOs,Treasuries are required to be registered with CRA.
 NPS contribution: Commences from the salary for the month following
the month of joining
 Employee Contribution(10% of salary )+Employer contribution( 14% of
salary)

 Contributions (Individual contribution as well as co-contribution from

Employers) + Investment Growth – Charges = Accumulated Pension Wealth
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NPS(National Pension System)

Features of NPS
 Tier-I Account
 Tier-I is Mandatory for subscribers
 Tier-I account with CRA-NSDL
 Monthly Contribution is 10% of (Pay+DA) by employee
and equal matching contribution by Govt.
 Limited withdrawal.
 IT exemption under 80C & CCD 1B is applicable
 Tier-II Account
 Tier-II is optional
 Can be activated online(www//[Link]) ,through
mobile app,PoP or Nodal oftice.
 Opened against the PRAN by initial deposit of 1000/- and
250/- min monthly contribution .Minimum total annual contribution
Rs2000/-
 At any time one can withdraw.
 No additional annual maintenance charge
 No IT relaxation.

Entities in NPS

• NPS Trust: The National Pension System Trust (NPS Trust) was
established by PFRDA the NPS Trust Deed. The NPS Trust has been set up and
constituted for taking care of the assets and funds under the National Pension
System (NPS). NPS Trust is the registered owner of all assets under the NPS
architecture

• Central Recordkeeping Agency (CRA): Recordkeeping, administration

and customer service are the core functions of NSDL e-Governance
Infrastructure Limited, which is acting as the Central Record-keeper for the
NPS.
• Pension Fund Managers (PFMs): Pension Fund Managers (PFMs) act as
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NPS(National Pension System)
intermediary for receiving contributions, accumulating them and making
payments to the Subscriber in the manner as may be specified by the
Authority.
• Trustee Bank: Axis Bank Ltd. has been appointed by PFRDA as the
Trustee Bank for NPS effective from 1st July, 2013. Trustee Bank as an
intermediary is responsible for the day-to-day flow of funds and banking
facilities in accordance with the guidelines/ directions issued by the Authority
under NPS. It receives NPS funds from all Nodal Offices and transfers the same
to the Pension Funds/ Annuity Service Providers/ other intermediaries as per
the operational guidelines.
• Annuity Service Providers (ASPs):
ASPs would be responsible for delivering a regular monthly pension to the
Subscriber after exit from NPS. ASPs have been appointed by PFRDA.
• Points of Presence (POPs)/Nodal Office: Points of Presence (POPs) are
different Financial Institutions who act as the first point of interaction for the
NPS Subscriber within the NPS architecture. The authorized branches of a POP,
called Point of Presence Service Providers (POP-SPs), will act as collection
points and extend a number of customer services to NPS Subscribers. Nodal
Office acts as collection points and extend a number of customer services to
NPS Subscribers
• Central Recordkeeping Agency Facilitation Center (CRA-FC): CRA-FC is
the entity appointed by NSDL to extend various services under NPS, to its users
across the country. The entities who have been appointed as CRA-FC shall
establish multiple branches across the country to provide services to the POPs
and POP-SPs.
List of ASP
• Life Insurance Corporation of India.
• SBI Life Insurance Co. Ltd.
• ICICI Prudential Life Insurance Co. Ltd.
• HDFC Standard Life Insurance Co Ltd.
• Bajaj Allianz Life Insurance Co. ...
• India First Life Insurance Company Limited.
• Star Union Dai-ichi Life Insurance Co.
List of PFM
• SBI Pension Fund,
• LIC Pension Fund, and
• UTI Retirement Solutions are the only fund managers who manage
pension contributions of government employees under NPS
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NPS(National Pension System)
NPS Architecture

Date of Implementation of 01.01.2005

NPS in the State (vide Finance Department
NPS in Govt. of Odisha
Notification
No.44451/F,Dt.17.09.2005.)

Eligibility Employees who have joined

in State Government
services under regular
pensionable establishment
w.e.f.01.01.2005
Fund Manager during A.G.(O) & CoA Odisha, in
Jan,2005- Jan,2011 accordance to O.M.
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NPS(National Pension System)
No.30132/F,Dt.13.07.2006
of Finance department
Agreement with PFRDA/CRA- Dt.29.05.2010 (with NSDL)
NSDL Dt.02.08.2010 (with PFRDA)
Adopted the PFRDA Feb,2011 vide Finance Dept.
Architecture Notification
No.5057/F,Dt.09.02.2011
Migrated to Centralized Feb,2013
Model of Uploading from
DT&I

Registration & Contribution process in NPS

• Subscribers to apply in CSRF(S-1) through DDO
• DDO then forwards the S1 form of employees in
duplicate to DTO(District Treasury Office) certifying the
employment details at the time of joining.
• During drawal of salary for the 1st month after joining,
DDO shall furnish a certificate on the body of the salary bill
stating that the application form S1 of the employee has been
transmitted to CRA-NSDL now Protean.
• On allotment of PRAN, DDO to deduct 10% from the
monthly salary of the subscriber & send the information
through IFMS to Nodal Office [Link](NPS Cell).
 NPS Cell then uploads NPS details in the centralized
model of uploading & transfers fund along with matching
Govt. contribution (14%) to Trustee Bank.
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NPS(National Pension System)
 Trustee Bank receives NPS funds from all Nodal Offices
and transfers the same to the Pension Funds/ Annuity Service
Providers/ other intermediaries.
Subscriber Registration process flow

Steps involved for Contribution Upload

Partial Withdrawal
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NPS(National Pension System)
• Subscriber to apply at the Nodal Office.
• Application needs to be processed at ([Link])
by Nodal Office.
• The Subscriber shall have been in the NPS at least for
the
period of three years from the date of his or her Joining
• maximum of three times during the entire tenure of
subscription.
• The Subscriber can opt for withdrawal not exceeding
25% of contributions made by him/her.
• The withdrawal amount is tax exempted.
• The partial withdrawal request may be rejected due to
wrong name or Bank account. In that case subscriber to apply
again after updating the same in CRA-NSDL in S-2 Form.
• What are the reasons for availing Partial Withdrawal?
A. Higher education of children
B. Marriage of children
C. For the purchase/construction of residential house.
D. For treatment of specified illnesses for Subscriber,
Spouse, children.
E. To meet medical and incidental expenses arising out of
the disability or incapacitation suffered by the Subscriber
F. For Skill development/re-skilling or any other self-
development activities
G. For Establishment of own venture or any start-up
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NPS(National Pension System)
Tax Benefits available under NPS :

• Employee’s own Contribution towards NPS Tier-I is

eligible for tax deduction under section 80 CCD (1) of the
Income Tax Act within the overall ceiling of Rs. 1.50 lakh
under section 80 C of the Income Tax Act. From FY 2015-16,
the subscriber is also allowed tax deduction in addition to the
deduction allowed under section 80CCD(1) for contribution
to NPS Tier I account subject to a maximum of Rs. 50,000
under section 80CCD 1(B ).
• Employer’s contribution towards NPS Tier-I is eligible for
tax deduction under Section 80CCD (2) of the Income Tax Act.
This rebate is over and above the limit prescribed under
Section 80C.
• Interim/ Partial withdrawal up to 25% of the
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NPS(National Pension System)
contributions made by the subscriber from NPS Tier-I is tax
free.
• With effect from 1.4.2019, lump sum withdrawal up to
60% of total pension wealth from NPS Tier-I at the time of
superannuation is tax exempt.
• Minimum 40% of the amount utilized for purchasing an
annuity from the Annuity Service Provider, registered and
regulated by the Insurance Regulatory and Development
Authority (IRDA) and empanelled by PFRDA is also tax
exempt.

Different Fund Management Schemes available to the

subscriber
• NPS contribution towards pension will be invested in the
default schemes for State Government employees of three
Pension Fund Managers (PFMs), viz
 LIC Pension Fund Limited,
 SBI Pension Funds Pvt. Limited and
 UTI Retirement Solutions Limited.
• The proportion in which contributions are allocated
among these three PFMs is decided by each of the state
government, which is mentioned in the Statement of
Transaction.
• Each of the PFMs will invest the funds in the proportion
of 85% in fixed income instruments and 15% in equity and
equity related instruments. Life Cycle based funds viz. LC-50
and LC-25 also available w.e.f. 01.04.2019.
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NPS(National Pension System)
• Option for investment choices and Pension Fund made
available to Government servants w.e.f. 01.04.2019.
• For full details, go through website [Link]
wherein the full details of the investment choices and fund
management details are provided.

Choice of Pension Fund and Investment Pattern in Tier-I of

NPS as under
Choice of Pension Fund :
• The Government subscribers shall be allowed to choose
anyone of the pension funds including private sector pension
funds.
• They can change their option once in a year.
• However, the current provision of combination of Public
Sector Pension Funds will be available as default option for
existing as well as new Government subscribers.
• There are two Choices :Auto /Active
• There are four Assets Classes i.e.
Equity,
Corporate debt,
Government Bonds and
Alternative Investment Funds.
• Subscriber first selects the PFM, and post selection of
PFM, Subscriber has an option to select any one of the
Investment Options
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NPS(National Pension System)
2. Choice of Investment Pattern : The following options for
investment choices shall be offered to Government
subscribers:
i. Default Scheme: The existing scheme in which funds are
allocated among three Public Sector undertaking fund
managers shall continue as default scheme for both existing
and new subscribers.
ii. Scheme G: Employees who prefer returns with
comparatively less amount of risk shall be given an option to
invest 100% of the funds in Govt. securities. (Scheme G)
iii. Auto Choice Life Cycle Funds: Employees preferring
better returns with comparatively higher risk shall be given
the options of the following Life Cycle based schemes.
a. Conservative Life Cycle Fund with maximum exposure to
equity capped at 25%- LC-25 Scheme.
b. Moderate Life Cycle Fund with maximum exposure to
equity capped at 50% LC- 50 Scheme. The Government
subscribers may exercise one of the above choices of
Investment pattern twice in a financial year.

Different Asset Classes Available for Your NPS Investments

Compared to traditional retirement investment options such
as Employees Provident Fund (EPF) and Public Provident Fund
(PPF), NPS is far more diverse in terms of the asset classes it
offers its subscribers. With NPS, you can spread your
investments in 4 different asset classes:
Equities (E)
– The money is invested in the stocks and other equity-
related instruments of companies listed in India.
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NPS(National Pension System)
Corporate Debt (C)
– The money allocated is primarily invested in Money Market
Instruments and Bonds issued by various Corporations
including Infrastructure Companies, PSUs (Public Sector
Units), and PFIs (Public Financial Institutions)
Government Securities (G)
The money is invested in Money Market Instruments and
Bonds issued by the State and Central Governments
Alternative Investment Funds (A)
– The money is invested in emerging investment routes such
as Real Estate Investment Trusts (REITs), Infrastructure
Investment Trusts (InvITs), Commercial Mortgage-Backed
Securities (CMBS), Mortgage-Backed Securities (MBS), etc.

Continuation of NPS account

• You can be in NPS till 75 years of age and continue to

avail tax benefits.
• NPS allows Subscriber an exclusive Tax Benefit upto Rs.
50,000 u/s 80CCD(1B) over and above the limit of Rs. 1.50
Lakh u/s 80C.
• All you need to do is initiate the continuation request
online by accessing CRA system ([Link]) using
your User ID (PRAN) & Password.
• Click on “Exit from NPS” Menu and click on “Request for
Deferment” option. Enter necessary details and submit
‘’Continuation’’ request. Get the request authorize from
Nodal Office, in case of Government sector and from Point of
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NPS(National Pension System)
Presence (POP), in case of All Citizens of India & Corporate
sector.
• Alternatively, you can approach your Nodal Office/ POP
and submit physical request.
• Please ensure that the request for continuation should
be initiated 15 days before the attainment of retirement
age. If request is not initiated before 15 days of retirement,
Subscriber needs to obtain an approval from NPS Trust and
submit request to CRA.
• In case of All Citizens of India sector Subscribers, the
NPS Account gets automatically continued till 75 years of
age (as per PFRDA Exit Regulations) and there is no need to
initiate separate continuation request.
• You will continue to enjoy all the facilities and options of
normal NPS account like access to CRA system, option to
switch fund managers and assets class etc. during the
continuation period.

Deferment of Withdrawal
• You can defer your Withdrawal and stay invested in NPS
up to 75 years of age.
• Multiple deferment options available.
– Defer only Lump sum withdrawal
– Defer only Annuity
– Defer Both i.e. Lump sum withdrawal as well as
annuity
• You have an option to withdraw deferred lump sum
amount in a phased manner over a period of 15 years or
withdraw anytime the entire amount.
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NPS(National Pension System)
• All you need to do is initiate deferment request online
by accessing CRA system ([Link]) using your User
ID (PRAN) & Password.
• Click on “Exit from NPS” Menu and click on “Request for
Deferment” option. Enter necessary details and submit ‘’
Deferment’’ request. Get the request authorize from Nodal
Office, in case of Government sector and from Point of
Presence (POP), in case of All Citizens of India & Corporate
sector.
• Alternatively, you can approach your Nodal Office/ POP
and submit physical request.
• Please ensure that the request for deferment should be
initiated 15 days before the attainment of retirement
age/completion of 60 years of age. Further, kindly note that
Subscriber is not allowed to contribute during the Deferment
period
Exit from NPS
• If you do not wish to continue your NPS account or defer
your Withdrawal, you can exit from NPS anytime.
• Log in to CRA system ([Link]) using your
User ID (PRAN) and Password.
• Click on “Exit from NPS” menu and click on “Initiate
Withdrawal request” option
• Enter necessary details including choice of Annuity
Service Provider (ASP) and Annuity Scheme which will
provide you pension.
• Once the details are submitted, you need to print the
system generated Withdrawal Form, paste photograph, sign
across photograph and against the declaration and submit
the form along with KYC documents to respective Nodal
Office, in case of Government sector and from Point of
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NPS(National Pension System)
Presence (POP), in case of All Citizens of India & Corporate
sector.
• The Nodal Office will verify the form along with the
attached documents and authorized the withdrawal request
online in CRA.
• If you are not able to raise withdrawal request online,
you can fill up the physical Withdrawal Form and submit it to
the respective Nodal Office/POP who will initiate the online
withdrawal request on your behalf. You can download
Withdrawal Form from Forms section under respective sector
on this website.
• Please ensure that your updated details (such as PAN,
address, contact details, Bank details, nomination details etc.)
are registered in your NPS account before initiating
withdrawal. If you wish to update any registered details,
please update online by accessing CRA system or submit
Form S2 to your associated Nodal Office/POP. You can
download Form S2 from Forms section under respective
sector on this website.
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NPS(National Pension System)
Role of CRA
Registration of Nodal Offices in the CRA system
 Issuance of unique PRAN to Subscribers
 Contribution Accounting
 Issuance of annual PRAN Transaction Statement
 Providing regular MIS to PFRDA and other entities such
as SABs
 Grievance Resolution Dashboard for PFRDA & State
Government

Different Prescribed Forms

• Form-N-1: DTA Registration
• Form N2 : DTO Registration
• Form N3 : DDO Registration
• Form N4 : DTO Covering Letter for DDO Registration
• Form-N-5: Nodal office Bank details update form
• Form S1 : Subscriber Registration
• Form S5 : DDO Covering Letter for Subscriber
Registration
• Form S6 : DTO Covering Letter for Subscriber
Registration
• Form S2 : Subscriber Details Change
• Form S7 : Subscriber's Photo and Signature Change
• Form S8 : Covering Letter of DDO for Change in Photo
and Signature of Subscriber
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NPS(National Pension System)
• Form S10 : Subscriber Registration Form for Tier-II
account
• Form S12 : Withdrawal Form from Tier-II account
• Form G1 : Subscriber Grievance Registration
• Form ISS-1 : Inter Sector Shifting
• Form-PW-601 Partial withdrawal

Role of DDO
 Registration under CRA by submission of Form-N3
 DDO shall receive the Registration form S1 at the
time of joining of the employee.
 Forward the S1 form of employees in duplicate to
DTO certifying the employment details at the time of joining.
 During drawal of salary for the 1st month after
joining, DDO shall furnish a certificate on the body of the
salary bill stating that the application form S1 of the
employee has been transmitted to NSDL.
 It is mandatory to deduct NPS contribution from
the salary of the month, following the month of joining.
 DDO shall deduct the contribution from salary
against the PRAN received through SMS in the mobile
Telephone or the account generation statement available in
NSDL portal without waiting for physical PRAN kit.
 Distribution of PRAN kit, I-PIN, T-PIN to Subscribers
 Any discrepancy noticed in PRAN kit shall be intimated
to Treasury by DDO.
 Send e-schedule of NPS contribution with salary bill.(in
case of non HRMS)
 NPS salary bills shall be presented in the Treasury
separately.
 Distribute Account statements to subscribers after
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NPS(National Pension System)
receipt from DTO/NSDL.
 Forward the application with calculation sheet to DTO
for approval to deduct arrear NPS contribution.
(F.D. Notification No.3689/F,Dt.7.2.2013)
 For non Try. Drawal establishment, the DDO shall draw
the matching contribution from Head of Account-2071 and to
prepare a draft in favour of Trustee Bank clubbing both SC &
GC and to send to NPS Cell, DT&I along with Annexures for
uploading.
 Forward Subscriber’s request to DTO for change in
details, switch, new scheme setup, etc.
 Forward subscriber’s Withdrawal requests to DTO
 Forward Subscriber’s Grievance requests to DTO
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NPS(National Pension System)
Role of NPS Cell , DT&I
 To upload NPS details along with transfer of fund to
NPSCAN in the centralized model of uploading
 To generate, validate the SCF (Subscriber Contribution
File) through FVU (File validation utility)of CRA and to
upload the validated SCF to NPSCAN & to generate
CSF(Contribution Submission Form).
 To draw the matching equal Government contribution
from the Head of Account “2071-01-117-1766-42007-
820-0-1-0 “, the officer in charge of NPS Cell are
required to prepare a miscellaneous bill in form No. OTC-13
and attaching a challan, transfer it to the Head of Account
“8342-00-117-0210-16068-261-0-0-0
 To prepare two bills with Head of Account “8342-00-
117-0211- 16089-261-0-0-0”(employee share) and “8342-
00-117-0210-16068-261-0-0-0”(employer share) and send
them to the current Account opened in favour of NPS Cell
at Trustee Bank
 To remit the Government and employee contribution
amount to the Pension Fund Account of the Trustee
Bank as per SCF uploaded in NPSCAN from the current
account opened in the Axis bank.
 the responsibility of the NPS cell to monitor timely
payment of the contribution and resolve issues related to
missing contributions.
 To monitor pending contribution file details
 To monitor missing credits in subscribers’ accounts
 To monitor Grievance pending against Nodal offices

Subscriber Contribution Upload

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NPS(National Pension System)
DTA
 Consolidation of records
 Preparation of file using File Preparation Utility (FPU)
 Validation of file through File Validation Utility (FVU)
 Upload of contribution file to NPSCAN
 Submission of funds to the trustee bank
 Confirmation of funds received by trustee bank
CRA
• Credit of units in Subscriber PRAN by running settlement