PFRDA : NPS Offer Document For Citizen

Name of the Organisation : Pension Fund Regulatory And Development Authority (pfrda.org.in)
Type of Facility : National Pension Scheme Offer Document For Citizen
Location : Delhi

Website :  http://www.pfrda.org.in/

Pension Fund Regulatory And Development Authority Related Content:
Open New Pension Scheme Account: https://www.indianjobtalks.in/6131.html
Investment Guidelines For NPS:https://www.indianjobtalks.in/25618.html

National Pension System (NPS) :
Pension Fund Regulatory and Development Authority (PFRDA) originally established by the Government of India through a resolution dated 10th October, 2003 & 14th November, 2008, has since attained a statutory status post the passage of Pension Fund Regulatory and Development Authority Act, 2013. In accordance with the provisions of the said Act PFRDA is mandated to promote old age income security by establishing, developing and regulating pension funds, to protect the interest of the subscribers to the schemes of pensions funds and for matters connected therewith or incidental thereto.

National Pension System is an important milestone in the development of a sustainable and efficient defined contribution pension system in India. It has the following broad objectives :
** To provide old age income
** Safe and reasonable market based returns over the long term
** Extending old age security coverage to all citizens

Applicant Should Note That :
** This Offer Document sets forth concisely the information about NPS that an applicant ought to know. Applicant should carefully read the Offer Document.
** The contents under the Offer Document may undergo change from time to time. Any such changes shall be notified by Pension Fund Regulatory and Development Authority (PFRDA) on its website in the form of circulars.
** Please go through the risk factors for a better understanding.
** Please note that for enrolling into NPS, you need to fill in the designated application form and submit to the Point of Presence (POP) chosen along with the Know Your Customer (KYC) and other documents required.

Who can join- :
A citizen of India, whether resident or non-resident, subject to the following conditions :
** You should be between 18 – 60 years of age as on the date of submission of his/her application to the POP/ POP-SP.
** You should comply with the Know Your Customer (KYC) norms as detailed in the Subscriber Registration Form. All the documents required for KYC compliance need to be mandatorily submitted.

Who cannot join- :
The following applicants cannot join :
** Un-discharged insolvent : Individuals who are not granted an ‘order of discharge’ by a court.
** Individuals of unsound mind : An individual is said to be of unsound mind for the purposes of making a contract if, at the time when he makes it, he is incapable of understanding it and of forming a rational judgment regarding its effect upon his/ her self-interest.
** Pre-existing account holders under NPS.

What are the choices that the subscriber has with respect to administration of his investments- :
Under NPS the subscriber has choice of choosing various functionaries for administration of investment of his funds and the details are as follows :
** The point of presence (POP) through whom he wishes to transact the NPS
** The Pension Fund Manager (PFM) whom the subscriber wants to manage his investments under NPS.
** The Investment scheme in which he wishes to invest his investments from the available options.
** The type of annuity and the Annuity Service Provider (ASP) from whom the subscriber wishes to purchase the annuity, at the time of exit from NPS.

For the convenience of those subscribers who are not in a position to choose a particular investment scheme/option, the NPS provides default options of asset allocation for safeguarding the interests of the subscribers.

What investment choice does the subscriber have- :
Under NPS, how your money is invested will depend upon your own choice. NPS offers you a number of fund managers and multiple investment options to choose from. In case you do not want to exercise a choice, your money will be invested as per the “Auto Choice” option, where money will get invested in various type of schemes as per your age.

The NPS offers you two approaches to invest your money :
** Active choice – Individual Funds (Asset Class E, Asset Class C, and Asset Class G )
** Auto choice – Lifecycle Fund

Active choice – Individual Funds :
You will have the option to actively decide as to how your NPS pension wealth is to be invested in the following three options :
Asset Class E – investments in predominantly equity market instruments.
Asset Class C- investments in fixed income instruments other than Government securities.
Asset Class G – investments in Government securities.

You can choose to invest your entire pension wealth in C or G asset classes and up to a maximum of 50% in equity (Asset class E). You can also distribute your pension wealth across E, C and G asset classes, subject to such conditions as may be prescribed by PFRDA. In case you decide to actively exercise your choice about investment options, you shall be required to indicate your choice of Pension Fund Manager (PFM) from among the eight Pension Fund Managers (PFMs) appointed by PFRDA. In case you do not indicate any choice of PFMs, please note that it is deemed that you have consented to opting for the default option for the PFM as provided by PFRDA and whereby SBI Pension Funds Private Limited would become the default PFM.

Auto choice – Lifecycle Fund :
NPS offers an easy option for those participants who do not have the required knowledge to manage their NPS investments. In case you are unable/unwilling to exercise any choice as regards asset allocation, your funds will be invested in accordance with the Auto Choice option.

In this option, the investments will be made in a life-cycle fund. Here, the fraction 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. Like the active choice, you must choose one PFM under the auto choice. In case you do not indicate any choice of PFMs, please note that it is deemed that you have consented to opting for the default option for the PFM as provided by PFRDA and whereby SBI Pension Funds Private Limited would become the default PFM.

Investment Guidelines:
The PFM will manage the following three separate schemes, each investing in a different asset class, being :

Asset class E (equity market instruments) :
The investment by an NPS participant in this asset class would be subject to a cap of 50%. This asset class will be invested in shares of the companies which are listed in Bombay Stock Exchange or National Stock Exchange and on which derivatives are available or are part of BSE Sensex or Nifty Fifty Index.

Asset class G (Government Securities) :
This asset class will be invested in Central Government Bonds and State Government Bonds.

Asset class C (credit risk bearing fixed income instruments) :
(i)Fixed Deposits of not less than 365 days of scheduled commercial banks with following filters :
a) Net worth of at least Rs.500 crores and a track record of profitability in the last three years.
b) Capital adequacy ratio of not less than 9% in the last three years. Net NPA of under 5% as a percentage of net advances in the last year
c) List to be reviewed half-yearly

(ii)(a) Credit rated Debt securities with maturity of not less than three years tenure issued by Bodies Corporate including scheduled commercial banks and public financial institutions [as defined in Section 4 (A) of the Companies Act]
(b) Provided that the investment in this category is made in instruments having an investment grade rating from at least two credit rating agencies. Apart from ratings by agencies, PFM shall undertake their own due diligence for assessment of risks associated with the securities before investments

(iii) Credit Rated Public Financial Institutions/PSU Bonds
(iv) Credit Rated Municipal Bonds/Infrastructure Bonds/Infrastructure Debt Funds.

The detailed investment guidelines issued by PFRDA are available on  pfrda.org.in

How to enroll in the NPS?
To enroll in the NPS, you need to submit the Subscriber Registration Form to the POP-SP of your choice. You can procure your subscriber registration application form from any of the Point of Presence – Service Providers (POP-SP) you wish to register with. Alternatively the subscriber registration forms are available

The applicant has to ensure that subscriber registration application form is duly filled up i.e. photograph, signature, mandatory details, scheme preference details etc and also submit Know Your Customer (KYC) documentation with respect to proof of identity and proof of address. One is advised to read the instructions given at the back of the form. NRIs should have an account with a bank based in India to open an account under NPS. The contributions made by the NRI would be subject to regulatory requirements as prescribed by RBI from time to time and FEMA requirements. Once the application form is duly filled in you can go to your nearest POP-SP and submit the PRAN application along with the KYC documents. PRAN card will be sent to your correspondence address by CRA. The list of POP –SP (Service Provider branches) is available on the CRA website www.npscra.nsdl.co.in and on the website of the concerned POP. To know the nearest POP-SP branch of your choice you may visit https://www.npscra.nsdl.co.in/pop-sp.php.

After the account is opened, CRA shall mail a “Welcome Kit” to you containing the subscriber’s unique Permanent Retirement Account Number (PRAN) Card and the complete information provided by the subscriber in the Subscriber Registration form. This account number will be the primary means of identifying and operating the account. You will also receive a Telephone Password (TPIN) which can be used to access your account on the call Centre number (1-800-222080). You will also be provided an Internet Password (IPIN) for accessing your account on the CRA Website (www.npscra.nsdl.co.in) on a 24X7 basis.

For More Details, Click Here :
https://www.indianjobtalks.in/uploads…1783097450.pdf

Helpdesk :
NPS Information Desk 1800 110 708 (Toll Free)
SMS NPS to 56677(Standard Charges will be applicable)