NEW PENSION SYSTEM

Tamojyoti Bose

Salient Features:

Came into force 1-01-04 (GoI)/1-2-05 (GoA) Two Tier I & Tier II Tier I Mandatory for regular State Government(Govt of

Assam) Servant joining on or after 01/02/2005 benefit of prospective date. For All India Service employees serving under Govt of Assam its 01/01/2004

In Tier I: 10% deduction on Basic Pay, DA & NPA from monthly pay bill following the month of joining

Equal and matching share paid by the Govt Tier I Non withdrawable till 60 years of age

Salient Features

Tier II: Voluntary, Withdrawable, No Matching Govt Contribution, Separate Independent Account

Investment up to 1 Lakh in Tier I account is exempted u/s 80C of IT Act

Minimum 40% of pension wealth to be invested on exit at 60 years or 80% in case of exit before 60yrs

This investment will provide for pension through Annuity Service Provider

GPF not applicable for new entrants

STATUS OF GoA ON NPS IMPLEMENTATION

• GoA having 60 Treasuries through out the State manage Pay disbursement through the Treasuries Comprehensive Treasury Management Information System (CTMIS)

• GoA has more than 9,200 DDOs managed by this System monthly for more than 1,20,000 NPS employees at present.

• Registered 82,541 nos. employees under NPS. IRA Compliant: 76,488 Non IRA: 6,053

• NPS Fund transferred to NPS Trust through Trustee Bank (Bank Of India/Axis Bank) Rs. 750 Crs up to June/2014(Regular)

GENERAL GUIDELINES ON NPS

• Contribution shall be recovered from salary through pay bills

• For suspension, based on Subsistence Grant• For HPL based on Leave Salary, for EOL

without pay no contribution• For Foreign Service Borrower is to pay

individual & matching contribution on B/D by 10th of following month at DoAT.

• Contribution will begin from salary of the month following the month of joining, no recovery for month of joining

Registration Procedure:

Submission of Annexure S1: Application for Generation of PPAN and PRAN

PPAN unique 16 digit number issued by concerned Treasury after joining

PRAN unique 12 digit number issued by NSDL on receipt of Annexure S1 by NSDL FC.

Both PPAN and PRAN are unique and should not be issued twice

PRAN Kits are issued by NSDL containing PRAN Card, I-PIN & T-PIN for accessing Statement from www.cra-nsdl.com

Maintenance of PPAN& PRAN:

PPAN should be quoted in the schedule of NPS to be submitted along with monthly paybill at treasury

PPAN & PRAN should be recorded in Service book PPAN & PRAN should be quoted in LPC on Transfer

and to be submitted in treasury for Treasury & DDO shifting in CTMIS

PPAN & PRAN Register to be recorded at office Monthly Contribution Register to be recorded at DDO,

Separate Pay Bill and Pay Bill Register

Know PPAN:

20111850004000872011185000400087

First 4 Digits : Year of Joining Govt Service (2011)

Next 2 Digits : Treasury Code(18)

Next 2 Digits : Ministry Code(50)

Next 3 Digits : Department Code(004)

Last 5 Digits : Running Serial Number(00087)

PRAN structure

1 1 1 0 0 1 4 6 0 5 6 9

Benefits to IRA Compliant Subscribers

• PRAN Card• Annual statement at present address as

mentioned in Annexure S1• SMS Alert & Email alert when contribution

credited in Account if opted for.• Accessing Statement over Internet at www.cra-

nsdl.com using I-PIN and over telephone using T-PIN

• Raising Grievances online and resolution thereof• Can activate Tier-II Account

Standard Forms for NPS

• Annexure S1: Application for allotment of PRAN

• Annexure S2: Subscriber Detail change request

• Annexure S5: DDO Covering Letter(for S1)

• Annexure S7: Change in Signature or Photograph

• Annexure S8: DDO Covering Letter(for S7)

• Annexure S10 & S11: For activation of Tier II

• Form 101-GS: Withdrawal after superannuation

• Form 102-GP: Withdrawal before attaining superannuation(premature due to resignation, termination etc)

• Form 103-GD: Withdrawal due to death of the subscriber.

• Form 101-GS-N1: Annexure for Nominee Details

Entities of NPS

PFRDA(Pension Fund Regulatory Development Authority) Regulator a statutory body of MoF

NSDL (National Security Depository Limited) Central Record keeping Agency

Trustee Bank: Axis Bank(Initially Bank of India) PFM (Pension Fund Manager) SBI(35%),

UTI(31%), LIC(34%) for Govt employees (change annually)

Custodian (Stock Holding Corporation India Ltd) ASP(Annuity Service Provider)

Entities in NPS

Annuity Service ProvidersPension Fund Managers

RegulatorNodal Office Trustee Bank

Subscribers Central Recordkeeping Agency

13

Directorate of Accounts & Treasuries,

Assam(SNO)/Treasury Offices(NO)

Deduction to Investment:

Monthly deductions collected centrally from CTMIS and the Govt share is added

Total contribution PRAN wise is uploaded in CRA system

Money is transferred to trustee bank through cheque by DoAT

Individual accounts gets credited with the investment in 3 PFM in allocated proportion

SBI: 35%, LIC: 34% and UTI: 31%

NPS ArchitectureInformation (Blue line) & Fund ( Green dotted line) Flow Chart

Custodian

NPS TRUSTPFRDA

Subscriber

Drawing &Disbursement

Officer

District Treasury

Office

Directorate of Treasuries &

Accounts

Trustee Bank

PFM’s

Annuity Service Providers

Fund Receipt

Confirmation

NAV

15

Exit from NPS

At 60 years maximum 60% can be withdrawn in lump sum and 40 % to be invested through ASP for monthly pension & family pension : Form 101GS

Incase of exit before 60 years maximum 20% can be withdrawn and 80% to be invested(irrespective of cause Resignation /Termination etc) : Form 102GP

Death Case during service period(Refund of whole amount). The annuity provision is under consideration : Form 103GD

Exit due to Super annuation(Age 60)Documents to be submitted with Form 101GS and

Credit Contribution Certificate signed by DDO & TO

• Original PRAN Card / Notarised Affidavit, if original PRAN card is not available

• Proof of Identification (refer Annexure B): Photo Identification of the subscriber with name of the subscriber as per the CRA records and proof duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Proof of Address (refer Annexure B): Address Proof in the name of the subscriber duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

Contd…

• Bank Details Proof: Cancelled cheque/ Bank Certificate on the Bank Letter head/Self-Attested Copy of Bank Passbook alongwith the subscriber photograph indicating the Bank Name and Address, Bank account number, Name of the Subscriber, IFS and MICR code. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Covering Letter from the mapped Nodal Office with Subscriber Name, PRAN and Date of retirement/ attaining 60 years of age.

• If the subscriber is non-IRA compliant, subscriber is required to fill the Subscriber Registration Form (S1 form)

• Nodal Office: Treasury Officer

• Original PRAN Card / Notarised Affidavit, if original PRAN card is not available

• Proof of Identification (refer Annexure B): Photo Identification of the subscriber with name of the subscriber as per the CRA records and proof duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Proof of Address (refer Annexure B): Address Proof in the name of the subscriber duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

Premature for Exit (Age below 60)Documents to be submitted with Form 102GP and

Credit Contribution Certificate signed by DDO & TO

Contd…

• Bank Details Proof: Cancelled cheque/ Bank Certificate on the Bank Letter head/Self-Attested Copy of Bank Passbook alongwith the subscriber photograph indicating the Bank Name and Address, Bank account number, Name of the Subscriber, IFS and MICR code. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Covering Letter from the mapped Nodal Office with Subscriber Name, PRAN and Date of resignation/exit.

• If the subscriber is non-IRA compliant, subscriber is required to fill the Subscriber Registration Form (S1 form).

• Original PRAN Card of the deceased subscriber/ Notarised affidavit, if original PRAN card is not available

• If the subscriber is non-IRA compliant, Nodal Office is required to fill the IRA Compliance Certificate form

• Proof of Identification (refer Annexure B): Photo Identification of the claimant with name of the claimant as per the CRA records and proof duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Proof of Address (refer Annexure B): Address Proof in the name of the claimant duly verified and attested by mapped Nodal Office. If there is difference in name, Nodal Office to provide the confirmation for the same.

Exit due to Death Documents to be submitted with Form 103GD and

Credit Contribution Certificate signed by DDO & TO

Contd…

• Bank Details Proof: Cancelled cheque/ Bank Certificate on the Bank Letter head/Self-Attested Copy of Bank Passbook alongwith the claimant photograph indicating the Bank Name and Address, Bank account number, Name of the claimant, IFS and MICR code. If there is difference in name, Nodal Office to provide the confirmation for the same.

• Covering Letter from the mapped Nodal Office with Subscriber Name, PRAN and Date of Death

• Original Death Certificate in English/Hindi. If there is difference in name, Nodal Office to provide the confirmation for the same. If the Death certificate is in language other than English/Hindi, certificate issued by Nodal Office is required.

Contd...

• No Objection from the mapped Nodal Office that no family pension/disability pension has been paid to the family member of the deceased subscriber and that they have no objection for release of the accumulated NPS wealth in favour of the Claimant(s) (Annexure NOC_D).

• Legal heir certificate / Succession certificate, if nomination is not registered in the CRA records (if all the legal heir are not claiming the NPS funds, then an Indemnity bond to be submitted by the claimant on a stamp paper of Rs.100. A Relinquishment Deed from all the legal heirs (those who are not claiming) on a Stamp paper of Rs. 100/- is required alongwith the KYC documents (Photo ID Proof and Address Proof) of all the legal heirs duly attested by the mapped Nodal Office.)

Annexure B(Documents for Identification & Address Proof)

The documents that can be provided as identification and address proof are as mentioned below:

a) Ration Card with photograph and residential address

b) Bank Passbook with photograph and residential address

c) Credit Card with photograph, any other address proof like latest telephone bill, electricity bill in the name of the subscriber.

d) Passport

e) Voter’s Photo Identity Card with residential address

f) Driving license with photograph and residential address

g) PAN card and any other address proof like latest telephone bill, electricity bill in the name of the subscriber.

h) Certificate of identity with photograph signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councilor or a Gazetted Officer and any other address proof like latest telephone bill, electricity bill in the name of the subscriber

• In case if the address is not present on any of the above documents or differs with address provided in this form, proof in respect of current residential address like latest telephone bill, electricity bill in the name of the subscriber should be submitted.

Pattern of InvestmentEach PFM would invest the fund in proportion of 85% in fixed

income instruments & 15% in equity and equity related instruments

1. Central Govt. Securities = 25%

2. State Govt. Securities =15%

3. Bonds/securities of Public Financial Institute=25%

4. Investment any above 3 categories =30%

5. Share of Companies=5%

Total: =100% 1/3 rd of 4 above can be invested in Private Sector

security/equity

Process Flow

CRA (NSDL) SERVICE CHARGE

Parameter Charges (Excusive Service Tax)

PRA Opening Rs.50 each subscriberAnnual PRA Maintenance

Rs.190 per year

Transaction Charge

Rs.4 for each transaction

Plus : 12.36 % Service charge

3 % Education cess.

Employees under NPS

No GPF No Gratuity(Gratuity might be paid under

consideration) No advance in NPS in Tier-I

Tier II

Pre requisites:

1. Already in Tier I

2. IRA Compliant subscriber with PRAN Card

Features:

1. Voluntary Savings

2. Free to withdraw at their will

3. No matching contribution

Scheme preference choice

CRA operationalised from Dec/2009 No separate AMC & Charge by CRA(paid by Govt of

Assam) All entered into Tier I is eligible with Minimum

contribution of Rs.1000 Unlimited number of withdrawals with Minimum

balance Rs.2000The NPS offers two approaches to invest subscriber’s

money:

Active choice - Individual Funds (Asset class E, Asset Class C, and Asset Class G )

Auto choice - Lifecycle Fund

Investment Scheme:

Asset class E (equity market instruments) – The investment in this asset class would be subject to a cap of 50%. This asset class will be invested in index funds that replicate the portfolio of a particular index such as BSE Sensitive index and NSE Nifty 50 index. These schemes invest in securities in the same weightage as comprised in an index.

Asset class G (Government Securities) – This asset class will be invested in central government bonds and state government bonds.

Contd..

Asset class C (credit risk bearing fixed income instruments) – This asset class will be invested in the following instruments

NPS for different sectors

• NPS for State Autonomous Bodies & Local Bodies notified by Govt of Assam vide No.DA.08/2011/127 dtd 15/11/2012. At present 7 nos of SABs registered and adopted NPS

• NPS Lite: Applicable for all unorganised working groups: Anganwadi workers, Dairy Farmers, Fisherman, Weavers, other wage Earners of Govt. Implementation through Aggregator. Implemented for Anganwadi workers/helpers under Social Welfare Dept under Govt of Assam

NPS for State Autonomous Bodies

Forms to be submitted to DoAT

• Letter of Consent(LOC)

• Master Creation Form(MCF)

• Annexure N2

• Annexure N3

• Minutes/Resolution of meeting of Autonomous bodies wherein decision of adoption of NPS by the body have been taken

Latest Developments

• The long awaited PFRDA Bill passed on 6/9/2013

• Payment of Death Gratuity/Family pension is under Consideration

• The draft proposal for exit have maximum 3 withdrawals during the contribution period(Criteria: 10 years of service, 25% of amount contributed by employee(not on Govt share) and on pre determined conditions only)

• Now in case of Death of the subscriber, claimant /nominee may annuitise the pension wealth

Important Links

https://www.npscra.nsdl.co.in

https://www.cra-nsdl.com

http://npscan-cra.com

http://pfrda.org.in

https://www.npscra.nsdl.co.in/state-forms.php