Invest
>
>
NPS Corporate Sector Model is the customized version of core NPS to suit various organizations and their employees to adopt NPS as an organized entity within purview of their employer-employee relationship.
- The Corporate employer registered with the NPS, can claim tax benefits for the amount contributed towards pension of employees. From 1st April, 2012 upto 10% of the salary (basic and dearness allowance) of employers Contribution can be deducted as ‘Business Expense’.
- The Corporate can save on their expenses incurred on formation of trust, management of funds and recordkeeping etc.
- Corporate can act as a facilitator to extend benefits of NPS to its employees
- Corporate may select the PF for its employees or leave the option to employees for selecting PF for themselves.
- Platform to co-contribute for employees’ pension.
- Cheapest investment product with better growth options through long term market-linked returns.
- Provides choice of various funds with a flexible investment patterns.
- Individual Retirement Account for record keeping at individual level ensures portability across geographies and employment.
- Employee’s as well as Employer’s contribution towards the NPS account of an employee is eligible for tax exemption as per the Income Tax Act, 1961 as amended from time to time.
- Additionally, offers Tier II account which is a voluntary savings facility with anytime liquidity/withdrawal option.
- Offers choice of Pension Funds to subscriber with an option to switch every year.
- outine disclosure of the funds helps subscriber to achieve better fund management.
-
Employees Contribution: Contribution amount to National Pension Scheme is tax free, that is, it is deductible from the total income), subject to upper limits Employee/Self-employed/Professional/Individual Contribution Eligible for tax deduction of up to 10% of salary (Basic + Dearness Allowance) or 10% of total gross income under section 80CCD(1), which is within the limit specified under section 80CCE of Rs. 1,50,000.
Eligible for additional tax deduction of up to Rs. 50,000 under section 80CCD(1B). This benefit will not attract the limit specified under section 80CCE. Hence contribution would be allowed over & above Rs. 1,50,000. - Employer Contribution: Eligible for tax deduction of up to 10% of salary (Basic + Dearness Allowance) under section 80CCD(2). An eligible contribution made by the employer is allowed as a business expense under Section 36 of Income Tax Act 1961.
There is no requirement for minimum number of employees for adopting NPS.
There is flexibility to select scheme either at Corporate level or Subscriber level. Corporate may opt for investment choice for its employee or leave the option to the employees.
NPS architecture involves below mentioned entities:
PFRDA : PFRDA is regulator for NPS. It is responsible for registration of various intermediaries in the system such as CRA, Pension Fund Managers, etc. It shall also monitor the performance of various intermediaries and ensure that all stakeholders comply with the guidelines/regulations issued by PFRDA from time to time.
CRA: Record keeping, administration and customer service functions for all NPS subscribers will be centralized and performed by CRA Protean eGov Technologies Limited (formerly known as NSDL e-Governance Infrastructure Limited) & KFintech CRA. On basis of instructions received from subscribers, CRA shall transmit such instructions to the appointed Pension Funds on regular basis. CRA will also provide periodic & consolidated NPS statements to each subscriber.
Pension Fund/Pension Fund Managers: Pension Fund Managers are responsible for managing investments of NPS subscribers. Pension fund managers invest strictly as per PFRDA investment guidelines. They also communicate NAV of each scheme to CRA on regular basis. NPS allows you to choose from any 1 of below mentioned Pension Fund Managers:
- ICICI Prudential Pension Funds Management Company Limited
- HDFC Pension Management Company Limited
- Kotak Mahindra Pension Fund Limited
- LIC Pension Fund Limited
- SBI Pension Fund Private Limited
- UTI Retirement Solutions Limited
- Birla Sun life Pension Management Limited
- Tata Pension Management Limited
- Max Life Pension Fund Management Limited
- Axis Pension Fund Management Limited
Annuity Service Providers: Annuity Service Providers are responsible for delivering pension/annuity to NPS subscriber as per chosen annuity plan. You have choice to select any 1 of annuity service providers upon exit from NPS as per guidelines.
To view Annuity Service Providers empaneled with PFRDA you may click on below mentioned link http://www.npstrust.org.in/content/list-annuity-service-providers-asps-empanelled-pfrda
Trust & Trustee Bank: NPS trust is responsible for taking care of the funds under NPS and is registered owner of all NPS assets. Trust holds an account as NPS Trustee Bank (Axis Bank). NPS Trustee Bank facilitates fund transfers across various entities of NPS system viz. Pension Fund Managers, Annuity Service Providers, subscriber, etc. NPS Trust is being administered by the Board of Trustees, as constituted by PFRDA.
Point of Presence (POP): POP is first point of interaction between subscriber and NPS architecture. POP is responsible for performing functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to designated NPS intermediaries like CRA etc. ICICI Securities is one of the PFRDA empanelled POP.
Custodian: Custodian is responsible for the custody of underlying assets. Custodian is SEBI registered custodial service. Stock Holding Corporation of India (SHCIL) is currently Custodian under NPS.
Adopting NPS will not dilute any statutory requirement for the corporate.
The minimum NPS Tier 1 contribution is Rs 1,000 per year. However, there is no maximum limit on the NPS Tier 1 contribution.
An exit is defined as the closure of the individual pension account of the subscriber under the National Pension System. In the following scenarios:
- (i) Upon attaining the age of 60 years.
- (ii) Before attaining the age of 60 years.
- (iii) Any time after attaining the age of 60 years till 75 years.
- (iv) Due to physical incapacitation or upon suffering bodily disability before the age of 60 years.
- (v) Due to death or subscriber being declared missing.
A subscriber shall submit the exit or withdrawal application for the purpose of withdrawing the benefits upon exit as provided in the regulations, on or before the expected date of exit from the National Pension System (NPS) to the associated point of presence. In case of death or subscriber being declared missing, the nominee(s), family member(s) as specified under the service rules or legal heir(s) shall submit the claim settlement application along with the required documents to the associated point of presence of the deceased subscriber.
You will continue to remain subscribed to the NPS upto the age of 75 (seventy-five) years.
Yes, the subscriber may exit at any point of time from NPS, by submitting a request to the associated point of presence or NPS Trust.
The subscriber shall submit his/her written request for deferment of the lump sum and/or purchase of annuity, fifteen days prior to attaining the age of 60 years, to any intermediary or NPS Trust.
Yes, the subscriber can exit from the NPS at any point of time during the deferment period.
No, the option of deferment of defer the lump sum withdrawal and/or purchase of annuity, shall not be available.
Yes, you are eligible for exit from NPS in case of physical incapacitation or suffering bodily disability leading to incapability to continue under NPS.
A disability certificate from a Government surgeon or doctor (treating such disability or invalidation of subscriber) stating the nature and extent of disability and also certifying that:
(a) The affected subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected subscriber, being not able to work for the remaining period of his life.
(b) Percentage of disability is more than seventy-five percent in the opinion of such Government surgeon or doctor (treating such disability or invalidation of subscriber).
Same as exiting from NPS upon attaining age of 60 years (refer Q3 to Q5).
You can voluntarily exit from NPS before attaining the age of 60 years if you are having subscribed to NPS for at least a minimum period of five years.
Annuitization – Minimum of 80% of accumulated pension wealth will be utilized for monthly annuity or pension.
Lumpsum – Remaining 20% of accumulated pension wealth will be paid to the subscriber.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
You will remain in NPS, until you attain the age of eligibility for purchase of any annuity. After attaining the minimum age required for purchasing any annuity, you can purchase the annuity as per your choice.
Where no valid nomination exists in accordance with these regulations, at the time of exit on account of death of subscriber, the nomination, if any, existing in the records of his or her employer for the purpose of receiving other admissible terminal benefits shall be treated as nomination for exit under the NPS.
The employer shall send a confirmation of such nomination in its records, to the NPS Trust or the CRA, while forwarding the claim for processing.
However, if valid nomination cannot be established even after referring the employer’s record as mentioned above, such case shall be settled to legal heirs.
If employer provides pensionary relief to the family members as specified under the service rules or on the basis of the legal heir certificate of the deceased subscriber, the employer shall have the right to adjust or seek to transfer the part or full accumulated pension corpus of the subscriber to itself as per the applicable service rules.
The remaining accumulated pension corpus, if any, shall be paid in lump sum to the nominees (s) or the legal heir(s).
Twenty percent of the accumulated pension wealth shall be paid as an interim relief in lump sum to the nominee(s) or legal heir(s) of the subscriber and after determination of subscriber as missing and presumed dead as per the provisions of the Indian Evidence Act 1872 and amendments thereto, the remaining eighty percent out of the accumulated pension wealth of the subscriber shall be paid to the nominee(s) or legal heir(s) of the subscriber.
Yes, the President of India or the Governor of a State, or the head of the organisation, in respect of a body corporate or other entity under the ownership and control, either of the central government or any state government or a government company, as the case may be, if so specifically provided in the service rules, governing the terms of employment of the subscriber with it, reserves the right of withholding the part of pension wealth, accumulated through co-contributions made by the employer to the Tier-I account of the subscriber and the investment income accruing thereon, for the purpose of recovery of the whole or part of any pecuniary loss caused, provided such loss is established, in any departmental or judicial proceedings, initiated against such subscriber by the employer concerned.
Right of withholding has to be exercised by the employer prior to the date of superannuation of the subscriber, pursuant to a notice to be given to the NPS Trust, and seeking to withhold the said pension wealth of such subscriber.
The amount withheld which is payable under the NPS will not be paid to the subscriber until the conclusion of the departmental or judicial proceedings, and subject to the final orders, passed in such proceedings.
The amount withheld becomes payable to the subscriber on the final settlement, as certified by the employer specified, which has sought withholding of such benefits, and will be paid to the subscriber as per applicable regulation while executing exit as soon as possible and in no case beyond ninety days of receipt of the final order by the NPS Trust. Provided that, in case the amount withheld becomes payable after the death of subscriber, on the final settlement, the benefits, will be paid to the nominee(s) or legal heir(s) of such subscriber as per the applicable regulations.
You can exit at any point of time, before attaining age of seventy-five years. However, your benefits at exit may vary depending upon the subscribed period (before or after completing three years from the date of joining of NPS).
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
No, the right of the subscriber to receive any pension or other amount under the NPS will extinguish.
The entire accumulated pension wealth of the deceased subscriber will be paid to the nominee(s) or legal heir(s).
Upon exit from tier-I of the NPS, the tier-II account of the subscriber will also be simultaneously and automatically closed, even if an application so specified for the purpose has not been received from the subscriber or nominees or legal heirs, and amounts under the said account will be paid to the subscriber or nominees or legal heirs.
You are allowed to partially withdraw maximum of three times during the entire tenure of subscription under the NPS.
You can initiate first partial withdrawal after completing period of three years from the date of your joining the NPS.
Partial withdrawal is allowed for the following specific purposes only.
(a) For Higher education of his or her children including a legally adopted child.
(b) For the marriage of his or her children, including a legally adopted child.
(c) For the purchase or construction of a residential house or flat in his or her own name or in a joint name with his or her legally wedded spouse. In case, the subscriber already owns either individually or in the joint name a residential house or flat, other than ancestral property, no withdrawal under these regulations shall be permitted.
(d) For treatment of specified illnesses: if the subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents suffer from any specified illness, which shall comprise of hospitalization and treatment in respect of the following diseases:
- Cancer
- Kidney Failure (End Stage Renal Failure)
- Primary Pulmonary Arterial Hypertension
- Multiple Sclerosis
- Major Organ Transplant
- Coronary Artery Bypass Graft
- Aorta Graft Surgery
- Heart Valve Surgery
- Stroke
- Myocardial Infarction
- Coma
- Total blindness
- Paralysis
- Accident of serious/ life threatening nature.
- Any other critical illness of a life-threatening nature as stipulated in the circulars, guidelines or notifications issued by the Authority from time to time.
(f) Towards meeting the expenses by subscriber for skill development/re-skilling or for any other self-development activities, as may be permitted by the Authority by issuance of appropriate guidelines, in that behalf.
(g) Towards meeting the expenses by subscriber for establishment of own venture or any start-ups, as may be permitted by the Authority by issuance of appropriate guidelines, in that behalf.
If a subscriber has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his/her family.
For the purposes of nomination wherever provided in the regulation.
(i) In relation to a male subscriber, shall mean his legally wedded wife, his children, whether married or unmarried, his dependent parents and his deceased son’s widow and children.
(ii) In relation to a female subscriber, shall mean her legally wedded husband, her children, whether married or unmarried, her dependent parents, her husband’s dependent parents and her deceased son’s widow and children.
(iii) In relation to any subscriber who does not identify themselves as male or female - their legally wedded spouse, their children, whether married or unmarried, their dependent parents and their deceased son’s widow and children.
Explanation – in any of above three, if the child of a subscriber or as the case may be, the child of a deceased son of the subscriber has been adopted by another person and if, under the personal law of the adopter, adoption is legally recognized, such a child shall be considered as excluded from the family of the subscriber.
Any such nomination made in favour of a person not belonging to your family shall be invalid and the you (subscriber) have to submit fresh nomination belonging to your family.
Such Nomination shall become void and the subscriber has to submit nomination again.
Yes - the nomination can be wholly or partly in favour of a minor. Further, the subscriber may appoint a major person of his family, to be the guardian of the minor nominee in the event of the subscriber predeceasing the nominee and the guardian.
Annuity shall be purchased from Annuity Service Providers (ASPs) empaneled with the PFRDA. The list of 14 ASPs empaneled is as under:
- Aditya Birla Sun Life Insurance Company Limited
- Bajaj Allianz Life Insurance Company Limited
- Canara HSBC Life Insurance Company Limited
- Edelweiss Tokio Life Insurance Company Limited
- HDFC Life Insurance Company Limited
- ICICI Prudential Life Insurance Company Limited
- ICICI Prudential Life Insurance Company Limited
- Kotak Mahindra Life Insurance Company Limited
- Life Insurance Corporation of India
- Max Life Insurance Company Limited
- PNB MetLife India Insurance Company Limited
- SBI Life Insurance Company Limited
- Star Union Dai-ichi Life Insurance Company Limited
- Tata AIA Life Insurance Company Limited.
* For any update in empaneled Annuity Service Providers (ASPs), you are requested to refer PFRDA’s website.
Annuity starts immediately after the minimum age as required for purchasing any annuity (depending upon choice of ASP and Annuity scheme for e.g. 30, 35, 38) from any of the empaneled annuity service providers. Subscriber/nominees/legal heirs need not wait till the age of 60 years.
The following are the most common variants that are available:
(a) Annuity for life with return of purchase price (amount given to annuity service provider) on death- Subscriber will receive payment of annuity till he/she is alive and payment stops after the death of subscriber. However, purchase price will be returned to nominees / legal heirs.
(b) Annuity guaranteed for 5, 10, 15 or 20 years and for life thereafter -
On death during the guarantee period – Subscriber will receive payment of annuity till he/she is alive and thereafter during the remaining guaranteed period, annuity will be paid to the nominee till the end of the guaranteed period after which the same ceases/stops. However, return of purchase price will not be returned to nominees / legal heirs.
On death after the guarantee period – Subscriber will receive payment of annuity till he/she is alive even after the guaranteed period is over. Payment of annuity stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(c) Annuity payable for life - Subscriber will receive payment of annuity till he/she is alive and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(d) Annuity for life increasing at simple rate of 3% p.a. – Subscriber will receive payment of annuity till he/she is alive increasing at simple rate of 3% p.a. and payment stops after the death of the subscriber. However, return of purchase price will not be returned to nominees / legal heirs.
(e) Annuity for life with a provision for 50% of the annuity to the spouse of the annuitant for life on death of the annuitant/subscriber - Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive 50% of payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse. If the spouse predeceases the subscriber, payment of annuity will cease after the death of the annuitant.
It may be noted that this annuity variant may be taken with or without return of purchase price.
(f) Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant/subscriber – Subscriber will receive payment of annuity till he/she is alive and thereafter spouse will receive payment of annuity till he/she is alive. Payment of annuity stops after the death of spouse. If the spouse predeceases the subscriber, the annuity ceases after death of the annuitant. It can be with or without return of purchase price. It may be noted that this annuity variant may be taken with or without return of purchase price.
*Subscriber can also add spouse in any of the variants above.
**All ASPs may not provide all the variants. It may vary from ASP to ASP.
***Pricing of annuity also varies from ASP to ASP.
POP-SP's are network of branches empanelled to assist subscribers in opening NPS Tier 1 and 2 a/c's and other service related requests under NPS. Please click the below link to check details of POP-SP's.