Saving BhiAur

Pension Bhi

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Pension Fund Regulatory and

PFRDA i th l t t bli h d bPension Fund Regulatory and

Development Authority

PFRDA is the regulator established byGovernment of India to promote old ageincome security in the country.PFRDA Establishes develop and regulatePFRDA Establishes, develop and regulatepension funds, to protect the interests ofsubscribers to schemes of pension fundsand for matters connected therewith orincidental thereto.PFRDA has put in place the institutionalframework and infrastructure required foradministering the ‘National Pension System’(NPS) f t l & ll(NPS) for government employees & allcitizens of India.

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PENSION

A i id lA pension provides peoplewith a monthly incomewhen they are no longerearningearning.

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NEED FOR PENSIONOne is not as productive in the old age as in the young age.The rise of nuclear family –Migration of younger earning members.Rise in cost of livingNEED FOR PENSION

Rise in cost of livingIncreasing longevityAssured monthly income ensures dignified life in old age

THE INDIAN PENSION STORYPrior to 2004Only available to 12% of the population– mainly for governmentemployeesB d d fi d b fit Eligible for

P iBased on defined benefits Pension

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Aft 2004

PFRDA has been established by the Government of India.Paradigm shift from

fi d fi fi d ib i

After 2004

Defined Benefit to Defined Contribution

PFRDA has made available NPS option to all citizens of India

t il i

Govt. of India’s Swavalamban Scheme:Special focus towards

to avail pension through NPS w.e.f 01st

May, 2009

Economically Disadvantaged and Unorganized Sector5

NPS -SWAVALAMBAN YOJNACatering to Unorganized SectorSpecial Focus on economically disadvantaged/marginal investorsNPS SWAVALAMBAN YOJNA

Ultra low charge structure• Account Opening – Rs 35 (One Time).• Annual Maintenance Charges (AMC)– Rs 70/Annum.

12 T i f• 12 Transactions free per annum.Government to contribute Rs.1000 to each NPS account If :Subscriber is not covered under any other social security schemes like PF, Pension – only self declaration is requiredAnnual contribution to be the range of Rs.1000-Rs.12000NPS -Swavalamban benefit for 5 yrs .S S ava a ba be e t o 5 y s

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FEATURES OF NPS -SWAVALAMBANIndividual accounts for every subscriberContribution as per convenience of the subscriberContribution as per convenience of the subscriberNo mandatory monthly deposit.Recommended minimum Rs. 1000/- per annum.Low charge structure AMC – Rs 225 Rs 70 / Annum

Account Opening – Rs 50 Rs 35 (one time)Safety of InvestmentInvestment by professional fund managers overseen by NPS TrustAccount Opening Rs 50 Rs 35 (one time)Transaction – Rs 5 12 Free Transaction

Up to 5% in Money Market and up to 15% in Equity

Up to 55% in Government Securities and up to 40% Corporate Bonds

NPS T t

EquityCorporate Bonds

Safe Investments

NPS Trust

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Any Citizen ofIndia, between 18-60 yearsof ageSh ld l ith KYCShould comply with KYC(Know your customernorms)

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KYC Requirement

KYC Requirements for NPS Swavalamban

Proof of Address Proof of Identity

KYC Requirements for NPS -Swavalamban

1. Electricity bill2. Telephone bill3. Depository Account Statement4. Credit Card Statement1. School Leaving Certificate2. Matriculation Certificate3. Degree of Recognized Educational Institution4. Depository Account Statement5. Employer Certificate6. Bank Account Statement / Passbook7. Rent Receipt8. Property Tax Assessment Order5. Bank Account Statement / Passbook6. Credit Card7. Water Bill8. Ration Cardp y9. Ration Card10. Passport11. Voter’s Identity Card12. Driving License9. Property Tax Assessment Order10. PAN Card11. Passport12. Voter’s Identity Cardg13. Certificate of address signed by a Member ofParliament or Member of Legislative Assembly orMunicipal Councilor or a Gazetted Officer.

y13. Driving License14. Certificate of identity signed by a Member ofParliament or Member of Legislative Assembly orMunicipal Councilor or a Gazetted Officer.Note-Subscriber is required to bring original documents & two self-attested photocopies (Originals will be returnedover-the-counter after verification)Proof of Address mentioned in Sr. No. 1 to 7 should not be more than six months old on the date of application.

HOW TO OPEN NPS - SWAVALAMBAN ACCOUNT?HOW TO OPEN NPS SWAVALAMBAN ACCOUNT?

Contact the CSC.Fill up a registration formProvide KYC DocumentsId P fIdentity ProofAddress ProofMinimum Contribution of Rs100 at the time of registration.Receive “Your” PermanentR ti t A t N bRetirement Account Number(PRAN) Card.10

PRAN C d ill l k lik thiPRAN Card will look like this

Your Name

Your Father’s Name

DOB

Your PRAN

Your Signature

PFRDA Hologram Your PhotographYour Photograph

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Exit / Withdrawal from NPS -Swavalamban/

Exit before 60 YearsExit before attainment of 60 years of age• Subscriber would be required to investminimum 80 % of accumulated savingsExit upon attainment of 60 years of age

Encashed20%

Annuitized

80%

minimum 80 % of accumulated savings(pension wealth) to purchase annuity.• Subscriber can withdraw balance 20%.

Exit upon attainment of 60 years of age• Subscriber would be required to investminimum 40% of accumulated savings(pension wealth) to purchase annuity.• At the time of exit the effort is to give a

80%

Exit on 60 years• At the time of exit, the effort is to give amonthly pension of Rs.1000/-. If 40% ofcorpus is not sufficient to give pension ofRs.1000/- entire pension wealth would besubject to annuitisation Encashed

60%

Annuitized

40%subject to annuitisation.Exit due to death of subscriber• Entire accumulated pension wealth wouldbe payable to the nominee/legal heirs of the

60%

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be payable to the nominee/legal heirs of thesubscriber.

• Monthly pension payable to b ib ill d hSubmit the withdrawal request form at the age of retirementChoose the Cash/Annuity Componentsubscriber till death• Monthly pension payable to subscriber till death andChoose your Annuity Service ProviderChoose the type of pension required.d h k d lsubscriber till death and return of purchase price on death of subscriber to the nominee/Legal heirsProvide the Bank account details.Start Receiving Monthly Pension.nominee/Legal heirs•Joint Life survivor•Joint Life survivor – Return of corpus

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CONTRIBUTION TO PENSIONSwavalambanContribution

CONTRIBUTION TO PENSION

SubscriberJoining at age Between 18-60 yearsiPension

Corpus Amount

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Projected PensionProjected Pension

Monthly Contribution till

Annual Swavalamban Contribution as perContribution till

the age of 60 years

Rs 100 Contribution as per scheme assumed for

5 years

Rs 1000

Assuming Annual Rate of Return of 8%g

Current Age of Subscriber

Assumed Corpus accumulated at 8% on cumulative basis

Lump sum withdrawable at Exit

Likely Monthly Pension

18 512626 307576 164918 512626 307576 164925 286903 158503 100030 187607 59207 100035 120959 0 9434040 76224 0 59445 46198 0 375

Monthly pension shown above are indicative amounts for illustration purpose only.Actual monthly pension may vary depending on the rates of premium at the time of

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Actual monthly pension may vary depending on the rates of premium at the time ofactual purchase and are not guaranteed. (Calculations are for life annuity for subscriberonly option)

BENEFITS OF NPS - SWAVALAMBANBENEFITS OF NPS - SWAVALAMBAN

Rs 1000/-/Contribution from

Govt.

Swavalamban

Safe

InvestmentsLow Costs

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Role of Stakeholders•• PFRDAPFRDA: / : / NSDL (CRA)NSDL (CRA)

– Provide the technical solution necessary for delivery of services .

– Ensure login credentials of AO’s and CC,s are d

Village Level Entrepreneur (VLE)

– Ensure availability of the required infrastructure at the CSC

generated .

– Pay the required commissions to CSC SPV to ensure sustainable service delivery via customer service points

– Ensure Nationwide and Regional Marketing

– Undergo required training to deliver services to citizens

– Ensure timely service delivery and adherence to the PFRDA norms

– Subscriber Registrationg gSupport .

• Service Center Agencies (SCA)- Account Office

– Submit form N2 / N3 to SPV in the prescribed

– Subscriber Registration

– Subscriber Servicing - Collection of subscriber’s regular contribution

CSC SPVformat

– Ensure VLEs are ready to enroll the service

– Ensure availability of adequate infrastructure at CSCs, including power backup and connectivity

M d it VLE ti it idi fi t

CSC SPV

Coordinate with PFRDA / CRA / Bank to ensure smooth implementation

Ensure VLE – codes are generated

Reconcile transactional details– Manage and monitor VLEs activity, providing first

level of support for timely service delivery

– Mobilize and sensitize the local community to access NPS - Swavalamban via CSCs

– Mapping of CSC to local CRA-FC

Share Commissions paid by PFRDA with SCAs and VLEs

Transferring funds into the system Grievance Handlingpp g

Implementation Approachp pp

• Scheme launch date August 1st 2013

• Prepare VLEs

– Training

• Existing VLEs to subscribe to the schemeg

– Currently 125,000 centers (Approx)

• Since all CSCs are becoming BCs they will have lot of footfall for banking transactionstransactions

• SPV has decided to undertake implementation of the scheme to citizens in a phased manner

Architecture & EntitiesArchitecture & Entities

Pension Fund Regulatory and Development Authority

NPS Trust PFMs CRA

Trustee Bank

Annuity Service

ProviderCustodian

CSC SPV

Provider

INTERFACE

CSC SPV

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Architecture

Pension Fund Regulatory and Development Authority

Architecture

g y p y

AggregatorOversight Office

CSC SPVHO

-----

Aggregator

Oversight Office

CSC SPV

HO

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----------Aggregator Account Office

Aggregator

CSC SPV Account Office

24 SCA Offices

-----------

S b ib

CollectionCenter

S b ib

CSC-----------

Subscriber

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Subscriber

-----

Registration of Aggregators and their Offices

Registration Forms are available onPFRDA website

Form N1

Form N2

OO

Forwarding Form with

1

32 Form N2

Form N3CRA

AO

covering letter32

4 5 Forwarding Form with Form N3

CC

4 5 gcovering letter

Details to be submitted to CRAName of the Office, Address, Email id,

Authorised Signature & StampSubscriber

g p

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Commission Sharingg

• Commission Sharing: To ensure sustainability of the VLE, and reduce attrition, h CSC SPV ill h h i i id b h PFRDA f llthe CSC SPV will share the commission paid by the PFRDA as follows:

– 80% of commission will be paid to VLE

– 10% of commission will be paid to SCA

– 10% of commission will be paid to CSC SPV

Subscriber ServicingSubscriber ServicingThe CSCs are the nodal point for servicing the customer requests for carrying out changes in the following cases:NameAddressPhone/Mobile Number/Email IDSubscriber Bank DetailsChange in nomination detailsThe SCAs must ensure that in all cases the request for change should beThe SCAs must ensure that in all cases the request for change should be

supported with prescribed documents Request for re issue of PRAN cardProvide information on Statement Of TransactionsProcess withdrawal requests (detailed in the next slide)Any other requests by subscriberAny other requests by subscriber23

S b ib S i i hd lSubscriber Servicing - Withdrawal Process

Transfers settlementamount into 6

Trustee Bank

subscribers and ASP

3

CRA system

Transfer of Settlement amount

Aggregator

Maker Checker

WithdrawalRequest

1 2

3

4 5Pension

Fund Manager

Checker

Request Processing • Execution of withdrawal Request

Calculates NAV andtransfers money to

Subscribers / Nominee

4

•withdrawal instructions to Trustee Bank & PFM

transfers money toTB

Cash FlowInformation Flow

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Process flow for Subscriber Servicing

S b ibSubscriber

Request to Change details

Collection Center 1. 6.

A Offi

(CSCs)

Verify and forward 2. 5.

Account Office(SCAs)

Acknowledgement Number through Request capture & Authorize3. 4.

CRA

e-mail/web access

https://cra-nsdl.com

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Services provided by CRA (1/2)Services provided by CRA (1/2)Registration of aggregator offices – Oversight Office (OO)/Account office(AO)/ Collection Center (CC).Issuance of unique PRAN to each subscriber.Maintain database of all PRANs and record the transactions related to eachsubscriber’s PRAN.Receive instructions from subscribers through their Aggregator; transmitsuch instructions to appointed Trustee Bank, Pension Fund Managers , AnnuityService Provider.Monitor each Aggregator’s contributions and instructions to transmit theinformation to the respective PFMs on a daily basis.CRA provides Aggregators, a web based interface to view/ download detailedhistory of transactions of PRAN.

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Providing subscribers with periodic Statement of Transactions (SOT)d ili h l ib i i i di i h dServices provided by CRA (2/2)

detailing the total contribution, time-wise credits into the account andother relevant information.Grievance RedressalAct on/transmit instructions of AggregatorsInvestment option selectionSwitching over optionsC fi ti tConfirmation reportRetirement Account Information to be provided to subscribersPension wealth accumulated in subscribers PRAA t th t b ithd b b ib i lAmount that can be withdrawn by subscriber in lump sum

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Subscriber

Process Flow

SCA

Submission of Form Verification of details, provide KYC documents, Consolidation and SubmissionCSC

Delivery of PRAN kit1. 2.9. (AO) Generand/oLetter

CSC(CC) NL-CC packets of8. 3. rate PRN

or Rejection r

Submission forms 4.7Scanning & digitization of Forms

Verification and UploadCRACRA-FC

4. 7. 5. 6. p29

Information Flow

Pension Fund Regulatory and Development Authority

Custodian(SHCIL)

NPS Trust

Trustee Bank

CSC SPV HO

48Reports/MIS

(SHCIL)BOI

CSC SPV Account Office 5 6

73

PFM

CSC

25CRA

9

S b ib

CSC

Information Flow

1Annuity Service

Providers

9

Subscriber

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Fund Flow

Pension Fund Regulatory and Development Authority

Fund Flow

Trustee BankBOI

Fund Flow

CSC SPVHO

1

CSC SPV Account Office

2

--------

--------

-------------------

PFM

CSC

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----------

-----------

Annuity ServiceP idS b ib

CSC

5

-------

--------------------------Providers

Funds FlowSubscriber

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CSC SPV Wallet Fund FlowCSC SPV Wallet Fund Flow

Citizen issued receipt.

VLE enters amount to deposit. Settlement account is checkedfor adequate balance

VLE account Debited(In Real Time)

--------------------------------------------------------------------------------------------

--------

VLE logs into the Portalfor service delivery

q (In Real Time)----------

-----------

Subscriber pays

for service delivery(using his OMT id & password)

------------------------------------------------------------------------------------

-------

-------

Funds FlowSubscriber pays to VLE an Amount

(Only in cash)

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Full ArchitecturePension Fund Regulatory and Development Authority

Full Architecture

R t /MISCustodian

(SHCIL)

NPS Trust

Trustee Bank

AggregatorOversight Office

8Fund Flow 1

Reports/MIS(SHCIL)BOI

Aggregator Account Office

3

46

72

--------

--------

-------------------

PFM

AggregatorCollection

CRA23

3

5

----------

-----------

S b ib

CollectionCenter

1Annuity Service

P id

3

4

5 Information Flow

9

-------

--------------------------Subscriber Providers

Funds Flow

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G i H dliGrievance Handling

Receiving of grievances submitted by the subscriber againstany NPS Intermediary including aggregator .

Uploading all grievances in the Central GrievanceManagement System (CGMS) of CRA on a daily basis.

The CGMS system of CRA would route the grievances torespective NPS intermediaries for resolution.p

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P i l A i i M i lPromotional Activity Material

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