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05/03/23 © Copyrights Reserved 2016 1 of 33
National Pension System (NPS)
Alankit Limited
05/03/23 © Copyrights Reserved 2016 2 of 33
Introduction
New Pension System (NPS), regulated and monitored by PFRDA reflects Governments effort to find sustainable solutions to the problem of providing adequate retirement income.
•Pension Fund Regulatory & Development Authority (PFRDA) was established by the Government of India, Ministry of Finance, on 10th Oct, 2003 to promote old age security
•PFRDA was further authorized on 29th July 2008 to extend NPS on a voluntary basis to all citizens of India
•NPS is now available to all Citizens of India including workers of both organized and unorganized sectors with effect from May 1, 2009 on a voluntary basis
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Objective
Voluntary Defined Contribution Pension System in India
Objectives• To provide old age income• Reasonable returns over the long term contribution• To extend the old age security coverage to all citizens of India
NPS accretes savings into subscribers PRA while he is working and use the accumulations at retirement to procure a pension for the rest of his life.
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NPS-Intermediaries
Trustee Bank
Annuity Service ProviderPension Fund Manager
Axis Bank NSDL
7 PFMs registered
Custodian
Stock HoldingCorp (SCHIL)
CRA
Registered POP (Alankit)
7 ASPs registered
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Who can Join NPS
A citizen of India, whether resident or non-resident
Between the age group of 18-60 years
Government Employees for Tier 2 account
Undischarged Insolvent, Individual of unsound mind and Pre-Existing account holder under NPS can not join.
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• Voluntary : Open to all Indian Citizen• Simple : Open an Account with any of the POP and get PRAN• Flexible : Choose your own Investment Options & PFMs• Portable : Operate your account from anywhere in the country• Regulated : Regulated, Monitored and performance reviewed by
PFRDA.• Tax benefit : Tax benefits applicable under Income Tax Act 1961• PFMs : Pension contributions invested by Professional Pension
Fund Managers• Low Cost : PFM charges 0.01%, ‘lowest in the world’• NRA of 60 : Can withdraw 60% of pension wealth in a lump sum or
in a phased manner• Withdrawal before 60 : Can withdraw 20% of pension wealth in a lump sum
manner
Benefits
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Types of Account
Non-
Withdrawable
Account
Voluntary Savings Facility (Withdrawable Account)
Tier I Account
Tier II Account
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Subscriber will make first contribution at the time of applying for registration with POP-SP.
The subscriber has option to contribute anytime during the year as per his convenience.
Minimum Contribution at the time of account opening
Rs. 500
Minimum amount per contribution Rs. 500Minimum annual contribution at the end of financial year
Rs. 6000
Minimum no. of contributions 1 per year
Tier I Account
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Tier II Account
Tier II is a pension savings account, with a facility for withdrawal to meet financial contingencies
No Account Opening & Account Maintenance Charges by CRA
Only transactions are charged by CRA & POPs
No limit on withdrawals from Tier II account
Investment Patterns same as Tier I
Minimum Contribution at the time of account opening
Rs. 1000
Minimum amount per contribution Rs. 250Minimum annual contribution at the end of financial year
Rs. 2000
Minimum no. of contributions 1 per year
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Pension Fund Managers
Kotak Mahindra Pension Fund Management Ltd.
SBI Pension Fund Private Ltd.
UTI Retirement Solution Ltd.
ICICI Prudential Pension Fund Management Ltd.
NPS allows you to choose any one of the seven entities
HDFC Pension Management Company Ltd.
LIC Pension Fund Ltd.
Reliance Capital Pension Fund Ltd.
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Withdrawal Option
Vesting Criteria Benefit
At any point in time before 60 years of Age
Person will be required to invest at least 80% of the pension wealth to purchase a life 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
At exit subscriber would be required to invest minimum 40% of your accumulated saving to purchase a life annuity from any IRDA-regulated life insurance company. The remaining 60% pension wealth can be withdrawn in a lump sum on attaining the age of 60
Death due to any cause
In such an unfortunate event, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. If the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure.
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Withdrawal Option
Vesting Criteria Benefit
At any point in time before 60 years of Age
Person will be required to invest at least 80% of the pension wealth to purchase a life 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
At exit subscriber would be required to invest minimum 40% of your accumulated saving to purchase a life annuity from any IRDA-regulated life insurance company. The remaining 60% pension wealth can be withdrawn in a lump sum on attaining the age of 60
Death due to any cause
In such an unfortunate event, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. If the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure.
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Partial Withdrawal Option
* Partial withdrawal of 25% of subscribers’ contribution is allowed thrice till the age of 60 years is attained by the subscriber.
* Such withdrawal is allowed in case of certain exigencies only.
* To claim first partial withdrawal, the subscriber must have remained invested in NPS system for minimum 10 years.
* There should be a time gap of 5 years between two successive withdrawals.
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Annuity Service Providers
Subscribers of the National Pension System (NPS) would have a choice to select Annuity Service Providers, and annuity schemes offered by them
PFRDA has at present empanelled the following Seven IRDA approved life insurance companies for providing annuity services to the subscribers of National Pension System (NPS).
Life Insurance Corporation of India SBI Life Insurance Co. Ltd. Star Union Dai-ichi Life Insurance Co. Ltd. ICICI Prudential Life Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Bajaj Allianz Life Insurance Co. Ltd. HDFC Life Insurance Co. Ltd.
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• Pension (Annuity) payable for life at a uniform rate to the annuitant only
• Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as you are alive
• Pension (Annuity) for life with return of purchase price on death of the annuitant (Policyholder)
• Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
• Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant
• Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant
Different Types of Annuity
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Tax Benefits
Specific Tax Benefits available under various sections of Income Tax Act 1961 towards contributions made in Tier-I account:
U/S 80CCE – up to Rs.1,50,000/ (individual tax limit)
U/S 80CCD(1B) – up to Rs.50,000/ (individual contribution)
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Investment Choice
Auto Choice
Active Choice
Life – Cycle Funds
Individual Funds
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Wealth Investment Option
ASSET CLASS E EQUITY
ASSET CLASS CCREDIT RISK BEARING
FIXED INCOME INSTRUMENTS
ASSET CLASS G GOVT. SECURITIES
• High Risk• High
Return
• Medium Risk• Medium Return
• Low Risk• Low Return
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Wealth Investment Option-Active Choice
• You have the option to actively decide that how your NPS Pension wealth is to be invested in the above three options viz. E, C, & G class assets.
• Cap on the investment into equity is fixed at 50% of your NPS Pension wealth.
• You can choose to invest your entire pension wealth in C or G asset classes too.
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Wealth Investment Option-Auto Choice
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Wealth Investment Option-Auto Choice
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Subscriber Registration Process Fill up Application form
All mandatory data fields are to be filled by the applicant
Affix a recent passport size colored photograph
Proper Signature/Thumb impression
Valid ID, Address and Date of Birth proof Required with form
Fill up Annexure for obtaining PRAN Card in Hindi
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Regular Contribution Acceptance
POP-SP will accept regular contribution from the subscribers as per the norms laid by PFRDA
POP-SP will issue the receipt against the contribution accepted
POP-SP shall immediately deposit the contribution in designated Bank Account
To follow the subscriber/s for the payment against the dishonoured cheque/s bounced if any.
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Subscriber Servicing
Range of services to the NPS subscribers: Carry out changes in subscriber details as per subscriber’s
request.
Receiving switch request for change in PFM.
Receiving withdrawal request from subscriber.
Attending to subscribers request for shifting to another POP-SP.
Any other NPS account related service. To forward the above to the POP/POP Reg. office. MIS pertaining to above will be uploaded by POP to CRA.
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Grievance Handling
Receiving and uploading Grievances in prescribed format against • POP / POP-SP • Any other NPS Intermediary
NPS has a multi layered Grievances redressal mechanism which is easily accessible
• Call Centre/ Interactive Voice Response System.• Web based interface. You can register the grievance at the website
www.npscra.nsdl.co.in with the use of I-PIN.• Physical form • The status of Grievance already registered can be checked at the above
website. If no response is received within 30 days or are not satisfied, the customer can directly submit his/her grievance to the GRC of PFRDA.
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Tier I – Annualized Return
For more info. on Returns, latest NAV, historical NAV, visit https://npscra.nsdl.co.in/nav-search.php
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Tier II – Annualized Return
For more info. on Returns, latest NAV, historical NAV, visit https://npscra.nsdl.co.in/nav-search.php
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PFM ReturnsNPS PFM Returns
Tier Scheme From March 31, 2010ICICI PRUDENTIAL PENSION FUNDS MANAGEMENT COMPANY LIMITED
KOTAK MAHINDRA PENSION FUND LIMITED
RELIANCE CAPITAL PENSION FUND LIMITED
SBI PENSION FUNDS PRIVATE LIMITED
UTI RETIREMENT SOLUTIONS LIMITED
LIC PENSION FUND LIMITED (From June 7, 2013)
HDFC PENSION MANAGEMENT COMPANY LIMITED (From Aug 1, 2013)
TIER I
C
March 31, 2011 (Annualized) 9.41% 10.86% 7.82% 12.66% 9.20% NA NA
March 31, 2012 (Annualized) 10.42% 10.52% 7.98% 11.86% 9.69% NA NA
March 31, 2013 (Annualized) 11.67% 12.01% 9.92% 12.67% 10.93% NA NA
March 31, 2014 (Annualized) 10.28% 10.40% 9.16% 10.74% 9.69% 7.35% 7.00%
March 31, 2015 (Annualized) 15.72% 15.22% 15.04% 15.71% 15.06% 15.43% 15.20%
March 31, 2015 (Absolute) 71.17% 71.14% 63.32% 74.02% 66.61% 23.92% 23.27%
E
March 31, 2011 (Annualized) 11.83% 11.89% 9.67% 8.05% 8.35% NA NA
March 31, 2012 (Annualized) 1.57% 0.22% -0.92% 0.15% -1.75% NA NA
March 31, 2013 (Annualized) 4.01% 3.85% 2.63% 2.83% 1.92% NA NA
March 31, 2014 (Annualized) 8.06% 7.55% 6.76% 7.05% 6.30% 12.76% 19.99%
March 31, 2015 (Annualized) 28.65% 28.41% 28.30% 28.24% 29.73% 27.51% 28.63%
March 31, 2014 (Absolute) 75.40% 71.83% 66.70% 48.44% 65.69% 43.78% 54.35%
G
March 31, 2011 (Annualized) 7.71% 9.14% 7.71% 12.25% 12.52% NA NA
March 31, 2012 (Annualized) 6.88% 7.63% 6.66% 8.80% 8.05% NA NA
March 31, 2013 (Annualized) 9.15% 9.59% 8.98% 10.35% 9.87% NA NA
March 31, 2014 (Annualized) 7.19% 7.33% 6.90% 7.73% 7.55% 5.53% 3.28%
March 31, 2015 (Annualized) 20.75% 19.61% 20.24% 20.68% 20.15% 20.93% 19.88%
March 31, 2015 (Absolute) 59.42% 58.73% 57.01% 62.53% 60.80% 27.62% 23.81%
TIER II
C
March 31, 2011 (Annualized) 10.74% 7.20% 7.17% 14.46% 7.62% NA NA
March 31, 2012 (Annualized) 11.50% 8.44% 7.52% 12.58% 9.49% NA NA
March 31, 2013 (Annualized) 12.20% 10.00% 9.00% 12.62% 10.64% NA NA
March 31, 2014 (Annualized) 10.64% 8.91% 8.26% 10.39% 9.38% 4.22% 6.12%
March 31, 2015 (Annualized) 15.91% 15.19% 14.97% 15.78% 15.27% 12.37% 9.51%
March 31, 2015 (Absolute) 73.70% 62.04% 57.90% 71.90% 65.05% 17.11% 16.21%
E
March 31, 2011 (Annualized) 10.12% 11.66% 9.51% 7.86% 10.16% NA NA
March 31, 2012 (Annualized) -0.67% 0.36% -0.93% -0.12% -0.84% NA NA
March 31, 2013 (Annualized) 2.70% 3.89% 2.64% 2.64% 2.62% NA NA
March 31, 2014 (Annualized) 7.03% 7.59% 6.88% 6.84% 6.67% -1.22% 7.93%
March 31, 2015 (Annualized) 28.66% 28.12% 28.25% 28.48% 31.02% 21.46% 22.77%
March 31, 2015 (Absolute) 68.81% 71.66% 67.33% 67.43% 69.67% 19.98% 32.51%
G
March 31, 2011 (Annualized) 6.43% 6.40% 5.68% 11.82% 16.44% NA NA
March 31, 2012 (Annualized) 6.39% 5.88% 5.72% 8.52% 9.94% NA NA
March 31, 2013 (Annualized) 8.99% 8.17% 8.32% 10.15% 11.13% NA NA
March 31, 2014 (Annualized) 4.88% 6.37% 6.41% 7.63% 8.36% 7.03% 5.92%
March 31, 2015 (Annualized) 20.70% 19.90% 20.44% 20.49% 20.24% 19.94% 19.45%
March 31, 2015 (Absolute) 58.00% 53.47% 54.39% 61.71% 65.84% 28.38% 26.52%
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Absolute Returns
For more info. on Returns, latest NAV, historical NAV, visit https://npscra.nsdl.co.in/nav-search.php
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Charges
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Charges
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THANK YOU By
Akash Singh
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