NEW PENSION SYSTEM (NPS)

1. New Pension System for every Citizen was introduced from 1st May 2009 by the Pension Fund Regulatory and Development Authority to provide old age pension security to citizens in the age group of 18-60. A brief detail of the Scheme (Tier I & Tier II) is as below:

• NPS is a voluntary Pension System of Pension Fund Regulatory and Development Authority (PFRDA) open to all citizens in the age group of 18-60 years.

• The Scheme is operative from 01.05.2009.

• The objective is to provide old age pension; reasonable market based returns over long term

• Bank designated branches i.e. Point of Presence-Service Provider (POP-SP) accept the application form and get the subscribers registered with Central Record keeping Agency (CRA) for generation of the Permanent Retirement Account Number (PRAN).

• The PRAN will be quoted in all future transactions.

• There are two models i.e. Tier I and Tier II.

• Tier-I account is where you contribute your savings for retirement into a non-withdrawable account till you reach 60 years and draw pension for the rest of your life.

In case of Tier I

• Minimum contribution at the time of account opening -Rs.500/-

• Minimum amount per contribution - Rs. 500/-

• Minimum Account Balance at the end of FY - Rs. 6000/-

• Minimum number of contributions in a year  1

• The subscriber will exit the scheme after attaining 60 years of age. The subscriber has the option to defer the withdrawal and stay invested in NPS up to 70 years of age however the subscriber is not allowed to make further contributions. He/She has to compulsorily annuitize 40% of the accumulated pension wealth. Option to annuitize 100% of the corpus is also available.

• A Tier-II account is a voluntary savings account form the subscriber is free to withdraw any time.

• The facility of Tier II account is being offered from December 1, 2009 to all citizens of India including Government employees mandatorily covered by NPS.

In case of Tier II activation of Government employees, mandatorily covered by NPS, There are two type of employees:

• IRA Compliant - Those Government employees who are having PRAN Card.

• INon-IRA Compliant - Those Government employees who are having only PRAN number, not having PRAN Card. For Tier II activation of these employees KYC verification is required.

• The Tier-II would enable the existing Permanent Retirement Account (PRA) holders to build savings through investments over and above those in the Tier I pension account. An active Tier I account will be a pre-requisite for opening of a Tier II account.

• No additional CRA charges would be levied for account opening and annual maintenance in respect of Tier II. However, CRA will charge separately for each transaction in Tier II, the charges being identical to the transaction charge structure in Tier I

• There are no limits on number of withdrawals in Tier II.

• There is a facility for separate nomination and scheme preference in Tier I and Tier II.

• There is facility of one-way transfer of savings from Tier II to Tier I.

• Bank details will be mandatory for opening a Tier II account.

• No separate KYC for Tier II account opening will be required; the only requirement is a preexisting Tier I IRA Compliant account.

In case of Tier II,

• Minimum contribution at the time of account opening -Rs.1000/-

• Minimum amount per contribution - Rs. 250/-

• Minimum Account Balance at the end of FY-Rs. 2000/-

• Minimum number of contributions in a year - One

• In case of Composite Application for Tier I and Tier II both, Minimum contribution at the time of account opening is Rs. 1500/-.

2. Click here to download Subscriber Registration Form

3. The Subscriber will be informed of the Permanent Retirement Account Number (PRAN) by the CRA. Once the CRA provides the PRAN, the subscriber can start depositing his subscriptions through his chosen POP-SP.

4. The CRA keeps a record of all subscriptions.

5. A subscriber has three options for his investments:

• HIGH RISK HIGH RETURN: Investments in predominantly Equity Market Instruments

• MEDIUM RISK MEDIUM RETURN: Investment in predominantly Fixed Income Instruments

• LOW RISK LOW RETURN: Investments in purely Fixed Income Instruments.

• In case no option is given Auto Choice will be done automatically.

6. SBI PENSION FUND PRIVATE LIMITED is one of the Pension Fund Managers handling subscription amounts.

7. Following costs are to be borne by the Subscriber at the time of registration and/or performing any transaction. The contribution will be remitted net of bank charges.

Parameter Code no Phone No.	Service charges to be paid to the POP by the Corporate (excluding service tax)
Initial Subscriber Registration/per subscriber	Rs .100/-
Initial Contribution amount / per subscriber	Ad valorem 0.25% of the contribution amount (Minimum: Rs. 20/- and Maximum: up to Rs. 25000/-)
Subsequent Contribution Transaction Charge/ per subscriber	Ad valorem 0.25% of the contribution amount (Minimum: Rs. 20/- & Maximum: up to Rs. 25000/-)
Any other transaction not involving a contribution from subscriber/ per subscriber	Rs. 20/-

Swavalamban Scheme benefits for NPS Account Holders:

Under the Swavalamban guidelines approved by the Government of India, all NPS accounts opened in 2010-11, 2011-12 and 2012-13 will be entitled to the benefit of Government co-contribution of Rs. 1,000 subject to fulfilling the prescribed eligibility criteria.

Click here to view Swavalamban operational guidelines.

The concerned NPS account holders are requested to submit the required declaration form to the designated branch at the earliest to avail of the Swavalamban benefit.

To know more or to open an NPS account, please walk into any of the designated branch. If you have any queries, please write to us at nps.ccmum@sbi.co.in or call at 1800112211. You may also access the details of the scheme at pfrda.org.in.

Most Important Terms & Conditions

1. The New Pension System (NPS) is a scheme run by the Government of India and SBI is one of the agents authorized to accept contribution and assist in opening accounts. The returns in this scheme are entirely under the control of the PFRDA.

2. For NPS account opening, subscriber should be in the age group of 18-60 years.

3. As per KYC norms Photo Id proof, Date of birth proof and Address proof are required to be submitted along with application form.

4. In case of Tier I:

• Minimum contribution at the time of account opening -Rs.500/-

• Minimum amount per contribution - Rs. 500/-

• Minimum Account Balance at the end of FY - Rs. 6000/-

• Minimum number of contributions in a year  1

5. In case of Tier II:

• Minimum contribution at the time of account opening -Rs.1000/-

• Minimum amount per contribution - Rs. 250/-

• Minimum Account Balance at the end of FY-Rs. 2000/-

• Minimum number of contributions in a year  1

6. An active Tier I account will be a pre-requisite for activation of a Tier II account.

7. In case of Composite Application for Tier I and Tier II both, Minimum contribution at the time of account opening is Rs. 1500/-.

8. In case of Tier II or Composite application, a cancelled cheque is also required to be submitted along with the application form.

9.Following costs are to be borne by the Subscriber at the time of registration and/or performing any transaction.

Parameter Code no Phone No.	Service charges to be paid to the POP by the Corporate (excluding service tax)
Initial Subscriber Registration / per subscriber	Rs .100/-
Initial Contribution amount / per subscriber	Ad valorem 0.25% of the contribution amount (Minimum: Rs. 20/- and Maximum: up to Rs. 25000/-)
Subsequent Contribution Transaction Charge / per subscriber	Ad valorem 0.25% of the contribution amount (Minimum: Rs. 20/- & Maximum: up to Rs. 25000/-)
Any other transaction not involving a contribution from subscriber/ per subscriber	Rs. 20/-

10. Subscriber can register only through Bank designated branches i.e. Point of Presence-Service Provider (POP-SP)