FAQ regarding New Pension Scheme in Ordnance Factories

OFFICE OF THE PRINCIPAL CONTROLLER OF ACCOUNTS(FYS)
10-A, S K BOSE ROAD. KOLKATA – 700001

NPS Section

Questionnaire regarding New Pension Scheme :-

1.What is New Pension Scheme ?

   A new defined contribution pension system in place of existing defined benefit system, applicable for fresh entrants to Central Government Service from 01-01-2004.

2. When it is started & for whom ?

   The system is mandatory for all new recruits to the Central Government Service from 01-01-2004 except the Armed Forces.

3.What is the quantum of the Contribution ?

   The monthly contribution to be deducted amounts to 10% of the Basic Pay, Grade Pay and DA to be paid by the employee & matched by the Central Government.

Regarding withdrawal from the NPS on death of by the employees who have been allotted PRAN and their contribution uploaded to NSDL.

KENDRIYA VIDYALAYA SANGATHAN
18-INSTITUTIONAL AREA,
SHAHEED JEET SINGH MARG,
NEW DELHI - 110016

F.NO.110126125/2012/KVS-NPS/PF

Dated: 06.11.2013

The Deputy commissioner/Director
Kendriya vidyalays Sangathan
All Regional Office & ZIETs

Subject : Regarding withdrawal from the NPS on death of by the employees who have been allotted PRAN and their contribution uploaded to NSDL.

Sir/Madam,

   The Pension Fund Regulatory and Development Authority (PFRDA) has now provided the interim procedure for withdrawal requests of employees arising out of the subscriber’s death. The PFRDA approved Withdrawal Form 103GD with Form 401 AN(Annexure) along with supporting documents are enclosed as annexure (Annexure—B). You are requested to follow the process as advised by PFRDA. The Withdrawal Form 103GD with Form 401 AN (Annexure) along with the supporting documents are to be submitted through to the Exceptional Handling Cell — CRA.

FAQ by Pensioners Portal New Pension Scheme (NPS)

Frequently Asked Questions (FAQs)
(Central Civil Pensioners)
(Last updated/Reviewed: 04.11.2013)

NEW PENSION SYSTEM

NPS.1 The CCS(P) Rules are applicable to govt. servants appointed on or before 31.12.2003.Are the employees who joined pensionable establishments of Govt. of India after 31/12/2003 eligible for any benefits under these rules?

   In accordance with DoP&PW O.M. No. 38/41/06-P&PW(A) dated 5.5.2009 such employees who joined after 31/12/2003 and/or their families may be given the benefit of disability pension or family pension provisionally till the finalization of rules under the National Pension System (NPS) on death/injury.

Offer Document for NPS-All Citizen Model-Revised

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.
 
   PFRDA has established the institutional framework and infrastructure required for administering the ‘National Pension System’ (NPS) for government employees as well as other citizens of India. For servicing of NPS subscribers, various intermediaries such as Central Recordkeeping Agency (CRA), Pension Fund Managers (PFMs) for professional management and investment of subscriber funds, Points of Presence (POP’s) for distribution of the product, Trustee Bank, Custodian and NPS Trust have been appointed and are functional.

Lok Sabha Passes Pension Fund Regulatory and Development Authority(PFRDA) Bill, 2011 with official amendments;

   Lok Sabha Passes Pension Fund Regulatory and Development Authority Bill, 2011 with official amendments; Subscribers Seeking Minimum Assured Returns Allowed to OPT for Investing their Funds in such Scheme Providing Minimum Assured Returns

   The Pension Fund Regulatory and Development Authority Bill (PFRDA), 2011 was passed by the Lok Sabha today with official amendments. It was earlier introduced in Lok Sabha on the 24th March, 2011 to provide for a statutory regulatory body the Pension Fund Regulatory and Development Authority (PFRDA) under the provisions of the Bill. The legislation seeks to empower PFRDA to regulate the New Pension System (NPS).

   The PFRDA Bill, 2011 was referred to the Standing Committee on Finance on the 29th March, 2011 for examination and report thereon. The Standing Committee on Finance gave its Report on 30th August, 2011. Some of the key amendments incorporated in the Bill based on the recommendations of the Standing Committee on Finance are as follows:

INVESTMENT GUIDELINES FOR PRIVATE SECTOR NPS.

INVESTMENT GUIDELINES FOR PRIVATE SECTOR NPS

1. Guidelines

1.1 The PF will manage the following separate schemes, each investing in a different asset class, being:

  1.1.1. Asset class E (equity market instruments) — (a)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. subject to restrictions outlined in Clause 2 below

   (b)The permitted cap, as mentioned above, is expected to be maintained at that level at all points in time. However, the amount of funds invested in that asset class can differ from the specified cap by no more than 5% for purposes of portfolio balancing.

   1.1.2 Asset class G (Government Securities) — This asset class will be invested in central government bonds and state government bonds subject to restrictions outlined in Clause 2 below.

   1.1.3 Asset class C (credit risk bearing fixed income instruments) — This asset class contains bonds issued by any entity other than Central and State Government. This asset class will be invested in Fixed deposits and credit rated debt securities. This includes rated bonds/securities of Public Financial Institutions and Public sector companies, rated municipal bodies/infrastructure bonds and bonds of all firms (including PSU/PSE), subject to restrictions outlined in Clause 2 below.

   1.1.4 Corporate CG – Presently applicable to only SBI Pension Funds Private Ltd, UTI Retirement Solutions Ltd & LIC Pension Fund Ltd. and replicates the scheme as applicable to Central Government employees and subject to instructions from PFRDA/NPS Trust in this regard from time to time.

   1.1.5 NPS Lite – Investment pattern similar to that prescribed by the Central Government for its own employees as amended from time to time (charges applicable as per Schedule VII).

   1.2 The PF must not leverage the portfolio. For the purpose of this Schedule, the PF shall be deemed to have leveraged the portfolio if it:

   1.2.1 enters into borrowings or other financial arrangements or creates or purports or attempts to create any security, charge, mortgage, pledge, lien or encumbrance of any kind whatsoever on the assets of the portfolio or any part thereof;

   1.2.2 undertakes any transaction the result of which would overdraw the account maintained by the Custodian on behalf of the PF for the purpose of settling transactions;

   1.2.3 commits the Trustee to supplement the assets of the portfolio or the account maintained by the Custodian on behalf of the PF for the purpose of settling transactions without the prior written consent of the Trustee by a Proper Instruction, either by borrowing in the name of the PF or the Trustee or by committing the PF or the Trustee to a contract which may require the Trustee to supplement those assets; or

   1.2.4 allows market movement to result in a leveraged position.

2. Investment Universe

2.1 Asset class E (equity market instruments)

2.1.1 Authorised Investments

   Investment 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.

2.1.2 Restrictions

   a. the assets are not to be encumbered.

   b. the PF shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has to make short sale or carry forward transaction or engage in badla finance (except as permitted under the extant regulations, from time to time).

   c. the investment exposure in an industry sector (classification as per NIC classification) shall be restricted to 15% of all NPS schemes portfolio of each PFM .

   d. the investment in any equity stock of a sponsor group shall be restricted to 5% of the paid up equity capital of all the sponsor group companies or 5% of the AUM of the concerned NPS scheme (Tier I and ll taken together) , whichever is lower. The investment in equity stock of the investee company of sponsor group shall be restricted to 5% of the paid up equity capital of the concerned investee

   company of the sponsor group or 5% of the AUM of the concerned NPS scheme (Tier I and ll taken together) , whichever is lower

   e. the investment in any equity stock of a non-sponsor group shall be restricted to 10% of the paid up equity capital of the concerned group companies of a non- sponsor group or 10% of the AUM of the concerned NPS scheme (Tier I and II taken together) , whichever is lower. The investment in any equity stock of the concerned investee company of non-sponsor group shall be restricted to 10% of the paid up equity capital of the investee company of a non- sponsor group or 10% of the AUM of the concerned NPS schemes (Tier I and ll taken together) whichever is lower.

   f. investment in IP0s/FPOs is not allowed

   g. investment in unlisted equity shares or equity related instruments is not permitted except in derivatives for the purpose of hedging and portfolio balancing only in accordance with the guidelines issued by SEBI/RBI

   h. no loans for any purpose can be advanced by the PF.

   i. pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme, funds may be invested in short-term deposits of schedule commercial banks or in call deposits or in short term money market instruments or other liquid instruments or liquid schemes of mutual funds not exceeding a limit of 10% of the scheme corpus on temporary basis only.

2.2 Asset class G (Government Securities)

2.2.1 Authorised Investments

   1. Government of India Bonds

   2. State Government Bonds restricted to 10% of the AUM of the Scheme and 5% to any individual state government

2.2.2 Restrictions

   a) the assets are not to be encumbered

   b) no loans for any purpose can be advanced by the PF.

   c) pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme, funds may be invested in short-term deposits of schedule commercial banks or in call deposits or in short term money market instruments or other liquid instruments or liquid schemes of mutual funds not exceeding a limit of 10% of the scheme corpus on temporary basis only.

   2.3 Asset class C (credit risk bearing fixed income instruments)

 2.3.1 Authorised Investments

   (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) 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 at least 75% of the investment in this category is made in instruments having an investment grade rating from at least two credit rating agency. Apart from the 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 lnstitutions/PSU Bonds

   (iv)Credit Rated Municipal Bonds/Infrastructure Bonds/Infrastructure Development Funds.

Investment Restrictions

   1. The assets are not to be encumbered

   2. The investment exposure in an industry sector (classification as per NIC classification) shall be restricted to 15% of all NPS schemes portfolio of each PFM.

   3. The investment exposure in debt securities of a sponsor group shall be restricted to 5% of the net worth of all the sponsor group companies or 5% of the AUM of the concerned NPS scheme (Tier I and ll taken together), whichever is lower. The investment exposure in debt securities of the investee company of sponsor group shall be restricted to 5% of the net-worth of the concerned investee company of sponsor or 5% of the AUM of the concerned NPS scheme (Tier I and ll taken together), whichever is lower.

   4. The investment in debt securities of a non-sponsor group shall be restricted to 10% of the net worth of all companies of a non- sponsor group or 10% of the AUM of the concerned NPS scheme (Tier I and ll taken together), whichever is lower. The investment in debt securities of the investee company of non-sponsor group shall be restricted to 10% of the net worth of the concerned investee company of a non- sponsor group or 10% of the AUM of the concerned NPS scheme (Tier I and ll taken together), whichever is lower.

   5. Investment decisions should be taken by PF in the best interest of subscribers with emphasis on safety, prudence, optimum return, sound commercial judgement and avoiding funds to remain idle.

   6. Any moneys received on the maturity of earlier investments reduced by obligatory outgoings shall be invested in accordance with the investment pattern.

   7. In case of any instruments mentioned above, the PF should take all steps to ensure that the interests of the subscribers are not compromised towards this and amongst other steps the investment should be under continuous monitoring and be reviewed from time to time to detect any signal of impairment /downgrade in rating of the security and the PF should take immediate steps to ensure that the interest of the subscriber are protected.

   8. The investment should be made by the PF through a Stock Exchange, or directly with other counterparties in respect of Government Securities and other debt instruments at the best possible rate available at the material time of transactions. The PF shall not purchase or sell securities through any broker (other than an associate broker) which is an average of 5% or more of the aggregate purchases and sale of securities under all schemes, unless the PF has recorded in writing the justification for exceeding the limit of 5% and reports of all such investments are sent to the Trustees on a quarterly basis. Provided that the aforesaid limit of 5% shall apply for a block of three months. The PF shall not utilise the services of the sponsor or any of its associates, employees or their relatives, for the purpose of any securities transaction. A PF may utilise such services only after obtaining prior permission of the Trustees.

   9. NPS Funds shall not be used by the PF to buy securities/bonds held in its own investment portfolio or any other portfolio held by it or in its subsidiary or in its Sponsor.

   10. The PF shall buy and sell securities on the basis of deliveries and shall in all cases of purchase, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has to make short sales or carry forward transactions or engage in badla finance (carry forward).

   11. The PF may enter into derivatives transactions, if it is in the interest of the subscribers’, only for the purpose of hedging and portfolio balancing, in

   accordance with the guidelines issued by SEBI/RBI. These derivatives transactions should be entered into only in recognised stock exchange. Credit default Swap are also approved derivatives for the purpose.

   12. The PF shall enter into transactions relating to Securities only in dematerialised form. The PF shall, for securities purchased in the non depository mode get the securities transferred in the name of the NPS Trust on account of the Scheme.

   13. Transfer of investments from one Scheme to another Scheme in the same PF, shall be allowed only if:-

   13.1 such transfers are made at the prevailing market price for quoted Securities on spot basis (Explanation: spot basis shall have the same meaning as specified by Stock Exchange for spot transactions)

   13.2 the Securities so transferred shall be in conformity with the investment objective of the Scheme to which such transfer has been made.

   14. Pending deployment of funds of a scheme in securities in terms of investment objectives of the scheme, funds may be invested in short-term deposits of schedule commercial banks or in call deposits or in short term money market instruments or other liquid instruments or liquid schemes of mutual funds not exceeding a limit of 10% of the scheme corpus on temporary basis only.

   15. The PF may alter these above stated restrictions from time to time to the extent the PFRDA Regulations change, so as to permit the Schemes to achieve their investment objective.

3. Investment Objectives

   The investment objectives for the three asset classes are outlined below:

3.1 Asset class E

   3.1.1 Benchmark — the performance of the scheme will be measured by reference to the total performance (dividends reinvested) of the BSE Sensex and NSE Nifty 50 Index.

   3.1.2 Performance objective — the investment objective is to optimise returns while investing in the chosen index over a rolling annual basis.

3.2 Asset class G

   3.2.1 Performance objective — the investment objective is to optimise returns.

   3.2.2 Risk — It is expected that the PF will be able to identify and justify the additional risks relative to the return, while managing the portfolio on an absolute return basis.

3.3 Asset class C

   3.3.1 Performance objective — the investment objective is to optimise returns.

   3.3.2 Risk — It is expected that the PF will be able to identify and justify the additional risks relative to the return, while managing the portfolio on an absolute return basis.

4. Allocation of funds across asset class for “Auto choice”

   The methodology for allocating funds in the three asset classes are outlined in the table below which illustrates the allocation of each asset class for “Auto Choice” option based on age of the investor:-

Age	Asset Class E	Asset Class C	Asset Class G
Up to 35 years	50%	30%	20%
36 years	48%	29%	23%
37 years	46%	28%	26%
38 years	44%	27%	29%
39 years	42%	26%	32%
40 years	40%	25%	35%
41 years	38%	24%	38%
42 years	36%	23%	41%
43 years	34%	22%	44%
44 years	32%	21%	47%
45 years	30%	20%	50%
46 years	28%	19%	53%
47 years	26%	18%	56%
48 years	24%	17%	59%
49 years	22%	16%	62%
50 years	20%	15%	65%
51 years	18%	14%	68%
52 years	16%	13%	71%
53 years	14%	12%	74%
54 years	12%	11%	77%
55 years	10%	10%	80%

Source:http://pfrda.org.in/writereaddata/linkimages/INVESTMENT%20GUIDELINES%20FOR%20PRIVATE%20SECTOR%20NPS147808164.pdf

Default ASP and Annuity Scheme for subscribers exiting from NPS and Seeking withdrawal of Accumulated Pension Wealth.

Pension Fund Regulatory and
      Development Authority
        
CIRCULAR

PFRDA/2013/5/PDEX/4

                                 14th February 2013

To,
All POP’s/Aggregators/CRA/ dealing offices of Central & State Governments,

Subject: Default ASP and Annuity Scheme for subscribers exiting  from NPS and Seeking withdrawal of Accumulated Pension Wealth

   PFRDA has empanelled seven Annuity Service Providers (ASP’s) for providing annuity services to NPS subscribers. As per current National Pension System (NPS) exit norms,the subscriber is mandatorily required to select one of the empanelled ASP’s along with an Annuity scheme from those offered by the chosen ASP at the time of exiting from NPS and seeking withdrawal of accumulated pension wealth (for reasons other than death of the subscriber).

   Based on the feedback received from stakeholders seeking provision of a default option to be exercised by the subscriber at the time of selection of the ASP and choosing of an annuity scheme, PFRDA has examined the matter and decided to assist the subscriber by providing a default option.

     After examining the various options provided by the different ASPs, it has been decided to provide for a default ASP and annuity scheme as below:

   1. Default Annuity Service Provider – Life Insurance Corporation of India

   2. Default Annuity Scheme - Annuity for life with a provision of 100% of the annuity payable to spouse during his/her life on death of annuitant’ and Under this option, payment of monthly annuity would cease once the annuitant and the spouse die or after death of the annuitant if the spouse pre-deceases the annuitant, without any return of purchase price.  

   3. However, where the corpus is not adequate to buy the default annuity variant and from  the  default ASP, the subscriber has to compulsorily choose an ASP who offers an annuity at the available corpus in the account of the subscriber.

   Also, it may be noted that this default option is being purely provided in the subscribers’ interest and to avoid any delay in claim processing and is not with a view to endorse/promote any particular ASP or annuity variant being offered by the ASP. 

   The default ASP and the default annuity scheme as above would be applicable for all variants of NPS i.e. Government Sector, Swavalamban and those accounts under NPSlite platform not able to meet the compulsory contribution under Swavalamban scheme, Corporate and All Citizen model.

   This is for the information of all concerned.   The circular has also been placed on PFRDA website at  http://www.pfrda.org.in and CRA website at http://www.npscra.nsdl.co.in.

Yours Faithfully,

Sd/-
  Venkateswarlu Peri
General Manager

Source:http://pfrda.org.in/writereaddata/linkimages/Default%20ASP%20and%20Annuity%20Variant487123241.pdf

Revision in documentary requirements in case of exits arising from Death of the subscriber under NPS-Swavalamban.

CIRCULAR

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

PFRDA/2013/3/PDEX/3 

                                            Date: 06/02/2013

To,
Dear Sir/Madam,

Subject:   Revision in documentary requirements in case of exits arising from Death of the subscriber under NPS-Swavalamban.

   Attention of all stakeholders is invited to the requirement of Death Certificate in original for claiming the benefits of the accumulated pension wealth in the account of a deceased subscriber by the nominee/legal heirs under National Pension System (NPS).

   Basing on representations from some of the stakeholders, the matter has been re-examined in light of the difficulties faced by subscribers in obtaining several sets of original death certificates.   

   It has been now decided that “a certified copy of the death certificate duly attested by the Aggregator/ POP (with the Aggregator/ POP having seen the original of death certificate and returning the same to the nominee/legal heirs) would be acceptable as sufficient proof of death of the subscriber for settlement of death claims arising from NPS-Swavalamban accounts only”.  The Aggregator/ POP in such cases have to specifically certify the copy of the death certificate with wording “ORIGINAL SEEN AND VERIFIED”.

   This is for the information of all concerned.

   The circular has also been placed on PFRDA website at  http://www.pfrda.org.in and CRA website at http://www.npscra.nsdl.co.in

Yours Faithfully

Sd/-
Venkateswarlu Peri
General Manager

Source:http://www.pfrda.org.in/writereaddata/eventimages/revison%20of%20doc%20req%20NPS%20Swavalamban8093653445.pdf

Withdrawal process/Exit Guidelines for NPS employees.

PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA

              Sub:- Withdrawal process/Exit Guidelines for NPS employees.

             Read:- 1. G.O. No.FD (Spl) 04 PET 2005, dated 31.03.2006
                         2. G.O. No.FD (Spl) 28 PEN 2009, dated 29.03.2010
                         3. G.O. No.FD (Spl) 01 PEN 2010, dated 20.10.2010                                       
                                                            ---
Preamble:- 

         Government of Karnataka has introduced a Defined Contribution Pension System known as New Pension system/scheme for its employees joining Government service on or after 1.4.2006 vide G.O. read at above (1) & (2) above.  This system/scheme is made operational from 1.4.2010 and the NPS is made applicable for the members of the All India Services (Karnataka cadre) joining the All India Service on or after 1.4.2004, in
G.O. read at (3) above.

         This G.O. is issued to detail the procedure for withdrawal of employees from the scheme before  attaining the age of superannuation and settlement of claims of the NPS employees in case of death while in service or on attaining the age of superannuation.

                       GOVT. ORDER NO. FD (Spl)  203  PEN 2012    
                   BANGALORE,  DATED 16th January 2013

       Government are pleased to  issue the following orders for the NPS employees:

          a. Upon  Normal  Superannuation: At least 40%  of the accumulated  pension corpus of the subscriber needs to be utilized for purchase of an annuity providing for the monthly  pension  of  the subscriber and  the balance is paid as a lump sum to the subscriber.

          b. Upon Death: The  entire accumulated  pension corpus (100%) would  be paid to the nominee/legal heir of the subscriber  and  there  would  not  be  any  purchase of annuity/monthly pension required.

          c. Exist from NPS before the age of Normal Superannuation (irrespective of cause):  At  leaset  80% of  the  accumulated pension  corpus   of   the subscriber needs  to  be  utilized for purchase of an annuity providing  for the monthly pension of the  subscriber  and  the  balance is paid as a lump-sum to the subscriber. 

                                                     BY ORDER AND IN THE NAME OF THE 
                                                      GOVERNOR OF KARNATAKA
            
   sd/-
                                                                    (PADMAVATHI)
                                                              Special Officer & Ex-officio,
                                                         Deputy Secretary to Government,
                                                            Finance Department. (Pension)

Source:http://www.kar.nic.in/finance/pension/FD(Spl)203PEN2012.pdf

Implementation of NPS.

   The New Pension System (NPS) has been implemented for various sectors like Central Government, State Government, Private Sector and NPS-Life.  The status of NPS in these sectors as on 10th November, 2012 is as under:-

Sector	No. of Subscribers (Figures in lakhs)	Assets under Management (Rs. In crores)
Central Government	10.62	14,846
State Government	14.67	7,445
Private Sector	1.64	835
NPS-Life	13.05	344
Total	39.98	23,470

   The number of subscribers is increasing every year in all the sectors.

Frequently Asked Questions on New Pension Scheme.

1. What is the New Pension System (NPS)?

   The NPS is a new contributory pension scheme introduced by the Central Government for employees joined in Government Service on or after 1.1.2004. During the year 2009, the NPS was kept open for public.

2. Who is covered by the NPS?

   a. Employees who have joined central government service on or after 01 January 2004 including Railways, Posts, Telecommunication or Armed Forces (Civil), Autonomous Body, Grant-in-Aid Institution, Union Territory or any other undertaking whose employees were eligible to a pension from the Consolidated Fund of India., earlier.

   b. This contribution pension scheme is also open to any Indian citizen between the age of 18 and 55.

3. I am covered by the NPS. Can I contribute to the GPF?

   No. The General Provident Fund ( Central Service) Rules, 1960 is not applicable for employees covered by NPS.

4. I Am covered by the NPS. Am I eligible to Gratuity?

   No. You will not be eligible to Gratuity.

5. How does the NPS work ?

   When you join Government service, you will be allotted a unique Personal Pension Account Number (PPAN). This unique account number will remain the same for the rest of your life. You will be able to use this account from any location and also if you change your job. The PPAN will provide you with two personal accounts:

   1. A mandatory Tier-I pension account, and

New Pension Scheme : Official amendments to the PFRDA Bill, 2011.

   Official amendments to the Pension Fund Regulatory and Development Authority Bill, 2011

   The Union Cabinet today approved the introduction of certain official amendments to the Pension Fund Regulatory and Development Authority Bill, 2011. These official amendments have been necessitated in view of the recommendations of the Standing Committee on Finance which has examined the Bill. Based on the recommendations of the Standing Committee on Finance, the Government has decided to accept the following:

   1. that the subscriber seeking minimum assured returns shall be allowed to opt for investing his funds in such schemes providing minimum assured returns as may be notified by the Authority;

   2. withdrawals not exceeding 25 per cent of the contribution made by subscriber will be permitted from the individual pension account subject to the conditions, such as, purpose, frequency and limits, as may be specified by regulations by the Pension Fund Regulatory Authority and Development Authority (PFRDA)

NPS performed better that GPF in the last year.

   The three NPS managers handling the pension funds of Central and state government employees have delivered average returns of 9.33% in the past one year, outperforming the state-run government provident fund (GPF), employees provident fund (EPF) and the public provident fund (PPF). The three-year annualised returns are also quite decent at 8.47%, though not as spectacular as in the past one year.

   More than 16 lakh central and state government employees have almost Rs 8,500 crore invested in the NPS. This money is managed by three pension fund managers - SBI Pension Funds, LIC Pension Fund and UTI Retirement Solutions. Each of the three funds manages roughly one-third of the NPS corpus.

   Though three years is a very short time to judge long-term instruments such as pension funds, the impressive performance is likely to silence the criticism that NPS is not allocating enough to growth assets. Central and state government NPS funds can invest a maximum of 15% in equities. Even in NPS for the general public, where investors can choose their own asset allocation, a maximum of 50% can be put in equities.

PFRDA Issues Revised Set of Guidelines for Registration of Pension Fund Managers to Manage National Pension System for the Non-Government and Private Sector.

   The Pension Fund Regulatory and Development Authority (PFRDA) today issued a revised set of guidelines for registration of Pension Fund Managers (PFMs) to manage the National Pension System (NPS) for the non-government and private sector.

   The revised guidelines, available on PFRDA’s website www.pfrda.org.in, have done away with the earlier bidding process, wherein a pre-determined number of slots were bid for by the PFMs, and the fees charged by them for managing the pension funds had to be uniform for all players. The earlier process has now been replaced by a system which lays down the eligibility criteria for registration as PFMs, and all interested players desiring to enter the pension industry, can register as PFMs subject to their fulfilling the eligibility criteria. There is no limitation on the number of PFMs. Further, the PFMs are now allowed to prescribe their own fee charges, subject to an overall ceiling to be laid down by PFRDA. It is expected that this would provide for an economically viable business model for the PFMs attracting a fresh set of entrants into the pension industry, and the resultant competition would ensure market driven fee structures, which would work to the advantage of the pension subscribers.