Options under rule 10 of the Central Civil Services (Implementation of National Pension System) Rules, 2021 from Central Government employees covered under the National Pension System

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Maximum age of joining National Pension System (NPS) increased from the existing 60 years to 65 years under NPS- Private Sector

Press Information Bureau
Government of India
Ministry of Finance

01-November-2017 17:08 IST

Maximum age of joining National Pension System (NPS) increased from the existing 60 years to 65 years under NPS- Private Sector. 

In continuance of the several initiatives under taken by Pension Fund Regulatory and Development Authority (PFRDA) during the last few years to increase the pension coverage in the country, PFRDA has now increased the maximum age of joining under NPS-Private Sector (i.e. All Citizen and Corporate Model) from the existing 60 years to 65 years of age.

         Now, any Indian Citizen, resident or non-resident, between the age of 60- 65 years, can also join NPS and continue up to the age of 70 years in NPS. With this increase of joining age, the subscribers who are willing to join NPS at the later stage of life will be able to avail the benefits of NPS.

         NPS provides a very robust platform to the subscriber to save for his/her old age income security. Due to the better healthcare facilities and increased fitness, along with the opportunities and avenues available in the private sector as well as in the capacity of self-employment, more and more people in their late 50s or 60s are now living an active life allowing them to be employed productively.

         The subscriber joining NPS beyond the age of 60 years will have the same choice of the Pension Fund as well as the investment choice as is available under the NPS for subscribers joining NPS before the age of 60 years.

         Subscriber joining NPS after the age of 60 years will have an option of normal exit from NPS after completion of 3 years in NPS. In this case, the subscriber will be required to utilize at least 40% of the corpus for purchase of annuity and the remaining amount can be withdrawn in lump-sum.

         In case of such subscriber willing to exit from NPS before completion of 3 years in the NPS, he/she will be allowed to do so, but in such case, the subscriber will have to utilize at-least 80% of the corpus for purchase of annuity and the remaining can be withdrawn in lumpsum.

         In case of unfortunate death of the subscriber during his stay in NPS, the entire corpus will be paid to the nominee of the subscriber.

         The increase in joining age will provide the options to the subscribers who are at the fag-end of the employment and expecting lump-sum amount at the time of retirement, but willing to defer their retirement planning for future, to open the NPS account and contribute the lump-sum corpus to NPS for better fund management by Professional Fund Manager to fetch better returns and plan for the regular income after some time. The Annuity rates available in the older age fetch better annuities than that at the age of 60 or less age.

This initiative will allow a larger segment of the society particularly senior citizens to reap the benefits of NPS and plan for their regular income.

New Benefits announced for NPS Subscribers in Union Budget 2017-18

In a bid to provide further impetus to the National Pension System (NPS), the following provisions have been introduced in the Finance Bill 2017 laid down in the Parliament today. 

Tax-exemption to partial withdrawal from National Pension System (NPS) 

The existing provision of section 10(12A)of the Income Tax Act, 1961  provides that payment from National Pension System (NPS)  to a subscriber  on closurer of his account or opting out shall be exempt up to 40% of total corpus  at the time of withdrawal . The amount utilized for purchase of annuity is also tax exempt. At the time of normal exit, 40% of the total corpus is mandatorily required to be purchased for annuity. The subscriber has the option to use higher amount for purchase of annuity. 

In order to provide further relief to the subscriber of NPS, it has been proposed to insert a new clause (12B) in the section 10 of Income Tax Act, 1961 to provide exemption on partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under. 

This benefit will be effective on partial withdrawal made by the subscriber after 1st April 2017. 

Further, Contribution up to 20% of the Gross Income of the Self-employed individual (Individual other than salaried class) will be deductible from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961, as against 10% earlier.

This is with a view to provide parity between a salaried employee and a self-employed.

This benefit will be available on contribution made by the self employed persons on or after 1st April 2017. 

This increased limit for tax benefit will help the self-employed individuals, to save taxes on higher contribution in NPS and thereby properly plan for their old age income security.

Additional tax deduction on investment upto Rs. 50000/- under Section 80CCD (1B) will continue to remain the same for all NPS subscribers whether salaried or self-employed.

Source:-PIB 

Revision of NPS employees to Old Pension Scheme in respect of date of vacancy

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

RAJYA SABHA

UNSTARRED QUESTION NO-1506

ANSWERED ON-29.11.2016

Revision of NPS employees to Old Pension Scheme

1506 . Shri Neeraj Shekhar

(a) whether Central Administrative Tribunal, Ernakulam bench has ordered the Central Government to revert the employees who had joined after 1st January, 2004 under NPS to Old Pension Scheme and has observed that date of vacancy should be the basis for inclusion under NPS or Old Pension Scheme instead of date of joining, if so, details thereof;

(b) whether Government has reverted them to Old Pension Scheme, if so, details thereof, if not, reasons therefor; and

(c) whether Government would issue notification for all Central/State Governments and Autonomous Organizations employees in this regard, as per the above orders, if not reasons therefor?

ANSWER

The Minister of State in the Ministry of Finance

(a) The Hon’ble Central Administrative Tribunal (CAT) in its judgment has declared that the applicants of Original Application No. 20/2015 are deemed to have been appointed from the date of vacancy arose and they shall be included in the CCS (Pension) Rules, 1972.

(b) No Sir. It has been decided to file a petition before the Hon’ble High Court of Kerala against the orders of Hon’ble CAT in Original Application No. 20/2015.

(c) No Sir, as it has been decided to file a petition before the Hon’ble High Court of Kerala against the orders of Hon’ble CAT in Original Application No. 20/2015.

Source: http://rajyasabha.nic.in/

PFRDA to train 75,000 people to drive NPS

NEW DELHI: Pension fund regulator PFRDA proposes to train 75,000 people who will form a "totally committed" workforce for the implementation of government's National Pension System.

Pension Fund Regulatory and Development Authority (PFRDA) is in the process of hiring training institute(s) that "has/ have the capability to train and create a totally committed workforce that would become the driving force for implementation of NPS".

As per the Request for Proposal, the regulator proposes to cover 600 district head quarters across the country covering about 45 participants per session with an objective to train around one employee per branch/uploading office. There would be about 1,670 sessions.

"Thus, in all approximately, 75,000 participants are to be trained," the RFP document said.

As per the RFP, the regulator proposes "to have services of training institute(s)/professional institute(s) for training of employees of Points of Presence (POPs, POP-SPs/APY-SPs /  Corporates / retirement advisers / or any other stakeholders/intermediaries as decided by PFRDA under NPS...".

Currently, NPS has more than 1.14 crore subscribers with total Asset Under Management (AUM) of more than Rs 1.09 lakh crore.

NPS is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers to make optimum decisions regarding their future through systematic savings during their working life.

Individual savings are pooled into a pension fund which are invested by PFRDA regulated professional fund managers as per the approved investment guidelines into the diversified portfolios comprising of government bonds, bills, corporate debentures and shares.

Source :  http://economictimes.indiatimes.com/

7th Pay Commission expressed its regret about transition from OPS to NPS

7th Pay Commission expressed its regret about transition from Old Pension Scheme to New Pension Scheme in its report.

2004-2011 Entrants : Government employees who have joined service between 2004 and 2011 have suffered due to delay in finalizing the structure of the NPS and the issue of detailed instructions. Although they have made regular contributions, in many cases, this money and/or counterpart contributions were not deployed in the market. In the case of AIS officers, some states are yet  to release counterpart contributions or pay interest on delayed contributions. This has led to a situation where the accumulated corpus even after 11 years of service could be meagre. It is necessary that this situation which arose during the transition from OPS to NPS be addressed.

The Commission therefore recommends that Central Governments and State Governments should, in a time bound manner, ensure that all the due contribution along with compounded interest, where contributions have been delayed, be deposited in the accounts of the beneficiaries. Advisories should be issued to the State Governments to deposit amounts, if not already done, in respect of NPS beneficiaries belonging to All India Services.

Many Association have pointed out that unlike the facility under GPF, it is not possible to make withdrawals under NPS, even to meet obligatory social expenditure. This forces employees towards increased indebtedness as they have to borrow from elsewhere.

The Commission notes that under the NPS Tier-I account, a subscriber is permitted to make partial withdrawal of twenty five percent of the contributions made to his/her individual pension account for certain specified purposes. Such withdrawals are permitted a maximum of three times during the entire tenure of subscription and a period of at least five years should have elapsed between two such withdrawals.

The Commission further notes that there exists a voluntary Tier-II account. Under this account, a subscriber can, at any time, withdraw the accumulated wealth either in full or part and there is no limit on such withdrawals provided the account has sufficient balance of accumulated pension wealth to cover the amount being withdrawn. However, the Tier-II account is yet to be made operational. The Commission therefore recommends that PFRDA should take steps to make the Tier-II accounts operational as early as possible to enable the NPS subscribers the facility of withdrawals from their accounts in case of requirement.

Transparency under NPS : Many associations and individuals have complained that the information relating to the NPS is inadequate, resulting in high degree of uncertainty in the minds of contributors about post-retirement benefits. The Commission noted that PFRDA sends a communication to every participant each month with the current pension wealth and the latest contribution that has been credited. The Commission recommends that focused efforts be made to capture email addresses and mobile numbers of subscribers so that seamless communication is ensured for all subscribers. The Commission recommends that consultation with stakeholders should also be held periodically in different parts of the country.

The Commission notes that no department of Government of India is taking ownership of the NPS. The Commission recommends that a Committee consisting of Secretary, Department of Financial Services, Secretary, Department of Pensions and Pensioners Welfare and Secretary, Department of Administrative Reforms and Public Grievances may be constituted to review the progress of implementation of NPS. The Commission also recommends that steps should be taken for establishment of an Ombudsman for redressing individual grievances relating to NPS.

Tax Treatment under the NPS : NPS is under the Exempt–Exempt – Tax (EET) regime while the General Provident Fund under the OPS is under Exempt–Exempt–Exempt (EEE) dispensation. Under the NPS, while the contributions and the accumulations are tax-exempt, withdrawals are taxable. As such, this is an inferior tax treatment when compared to other pension programmes such as General Provident Fund, Contributory Provident Fund, Employees Provident Fund and Public Provident Fund wherein contributions, accumulations and withdrawals are tax-exempt.

The Commission feels that tax neutrality should be ensured across various avenues for long term savings for post retirement incomes so that the employees covered by NPS are not at a disadvantage. The Commission therefore recommends that withdrawals under the NPS should be tax-exempt to place NPS at par with other pension schemes. The Commission also recommends that the service tax levied at the time of annuity purchase by NPS subscribers should be exempted.

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National Pension System(NPS): Clarifications on Settlement of Claims Relating To Exits, Involving Purchase of Annuities

 PENSION FUND REGULATORY

AND DEVELOPMENT AUTHORITY

B-14/A, Chhatrapati Shivaji Bhawan

Qutab Institutional Area,

Katwaria Sarai, New Delhi – 110 016

Phone: 011 – 26517503

Fax: 011 – 26517507

Website: www.pfrda.org.in

Circular  No. PFRDA/2016/5/Exits/01 dated 03.03.2016

Subject: Clarifications on Settlement of Claims Relating To Exits, Involving Purchase of Annuities

1. Whereas the authority has notified the PFRDA (Exits and Withdrawals from National Pension System) Regulations, 2015 on 11th May, 2015 and is in force.

2. Number of claims have been received post the notification of the regulations covering pre-mature exits and also pertaining to claims arising out of the death of the subscriber under NPS. It has been brought to the notice of the Authority that as default annuity schemes mentioned under Regulation 3 of the PFRDA (Exits and withdrawals from National Pension System) Regulations, 2015 have not been made available by the Annuity Service Providers yet, these claims could not be settled and thus there exists a difficulty in settling claims in accordance with the aforesaid Regulations.

3. The Authority having considered and upon being satisfied that the claims of the subscribers are not being able to be processed and settled in accordance with Regulation 3 of the PFRDA (Exits and Withdrawals from National Pension System) Regulations, 2015 and to ensure that the interest of the subscribers are protected in this regard, has decided that till the time the default annuity schemes as mentioned under aforementioned Regulation 3, are made available to the subscribers, the claims both present and future shall be settled in the following manner;

1	Existing Provisions	Removal of difficulty
	Regulation 3 (b) applicable in case of pre-mature exit (to extract proviso from regulations) In place of default annuity scheme	Any annuity scheme provided by the Annuity Service Provider such that scheme shall mandatorily cover the spouse of the subscriber.
2	Regulation 3 (C) applicable in case of death (to extract proviso from regulations)	The entire accumulated pension wealth (100%) would be paid to the nominee/legal heir of the subscriber and there would not be any purchase of annuity/monthly pension

4. The above provisions for removal of difficulty shall be in force till the default annuity schemes are devised by the Annuity Service Providers and made available to the subscribers, and shall cease on a date notified by the Authority, whereafter settlement of claims shall be in accordance with the applicable provisions of the regulations. All other provisions of settlement including settlement of lump sum pension wealth shall be continued to be governed by the applicable provisions of the regulations.

5. This clarification for removal of difficulty is issued by the Authority in exercise of its powers under Section 14 of the Pension Fund Regulatory and Development Authority Act, 2013 read with Regulation 39 of the PFRDA (Exits and Withdrawals from National Pension System) Regulations, 2015.

Yours faithfully

Sd/-

(Subroto Das)

Chief General Manager

Source:http://pfrda.org.in/MyAuth/Admin/showimg.cshtml?ID=842

New Pension System Touches 1 Crore Membership

National Pension System (NPS) had 11,459,555 subscribers with a total corpus of Rs. 90, 327 crore as on 23rd January, 2016. The total Assets under Management are worth Rs. 109,140 crore while Assets under Management per subscriber is Rs. 95,000 on an average.

The number of NPS Subscribers of the Central Government are 1611,020 with a total corpus of Rs. 34,754 crore while subscribers from the different State Governments are 2,859,094 with a total corpus of Rs. 45,486 crore. The number of NPS subscribers in the Corporate Sector are 448,509 while in Unorganized Sector is 128,484, the total being 576,993. The number of subscribers under NPS Lite include 4,463,637 and under Atal Pension Yojana (APY) 1,948,811, with a total number of subscribers 6,412,448 in these two categories.

NPS subscribers of Central Government are 14.1% of the total subscribers while that of the State Governments are 24.9%. The NPS subscribers under NPS Lite constitute 39% while under APY 17% of the total subscribers.

Since PFRDA has completed two years of its statutory status on 1st February, 2016, to mark this occasion, PFRDA in collaboration with all its intermediaries in the National Pension System including Central and State Governments’ Nodal Offices, POPs, Aggregators, Central Recordkeeping Agency and NPS Trust etc. is observing NPS Service Week from 1st to 6th February, 2016. This week-long campaign is being dedicated to service-orientation towards the subscribers and aimed at awareness building and improved information dissemination. During this Service Week, besides sharing of information on the range of functionalities and services now available under the NPS, the subscriber community will be apprised about the need for constant updation of data/information to enable the system to operate at its optimum service level, so that the intended benefits can reach all the employees/subscribers under NPS. Besides, the subscribers will also be able to make best use of all the opportunities and facilities.

The Pension Fund Regulatory and Development Authority (PFRDA) is organizing the 2nd Pension Conclave in national Capital on 4th February 2016 with the theme, “Towards Universal Pension: Coverage, Adequacy and Sustainability” in which all the stake holders are expected to participate and share their experiences. PFRDA proposes to use this occasion to acknowledge/award the best performing banks and Post Offices in mobilization and registration of subscribers under the Atal Pension Yojana (APY) up to 31st December 2015, and institute awards for best performing POPs under the Voluntary segment of the National Pension System.

Earlier, PFRDA launched NPS Awareness Programme for State autonomous bodies, Unorganized Sector, Corporate Sector and other categories in order to highlight the benefits of joining NPS and has requested the various State Governments to implement NPS more inclusively among the State Autonomous Bodies, Boards, Corporations, Societies, Universities and State aided institutions under various State Government departments. During the awareness programme, key features and benefits of NPS, details and process of joining NPS, details about NPS architecture investment and exit guidelines of NPS are highlighted.

National Pension System (NPS) Service Week will be observed from 1st February to 6th February, 2016

Press Information Bureau
Government of India
Ministry of Finance

29-January-2016 11:35 IST

To mark the completion of two years of statutory status of PFRDA, National Pension System (NPS) Service Week will be observed from 1st February to 6th February, 2016 dedicated to service-orientation towards the subscribers and building awareness and improved information dissemination.

PFRDA would be completing 2 years of its statutory status on February 1, 2016 as the ACT conferring the statutory status to PFRDA was notified on 1st Feb 2014. To mark this occasion, PFRDA in collaboration with all its intermediaries in the National Pension System (NPS), namely the Central and the State Governments nodal offices, POPs, Aggregators, Central Recordkeeping Agency, NPS Trust etc. is observing NPS Service Week from February 1- 6, 2016. This week-long campaign is being dedicated to service-orientation towards the subscribers and aimed at awareness building and improved information dissemination.

On this occasion, besides sharing of information on the range of functionalities and services now available under the NPS, the subscriber community shall be apprised about the need for constant updation of data/information to enable the system to operate at its optimum service level, so that the intended benefits now available under the new functionalities, can reach all the employees/subscribers under NPS. Besides, the subscribers will also be able to make best use of this opportunity and facilities available therein. 

Following are some of the activities which may be undertaken by the nodal officers in the proposed NPS Service Week: 

• Creating awareness about the NPS – Salient features of the scheme, the process of joining it, special efforts to reduce subscribers’ grievances, etc.

• Printing and distribution of the subscriber brochure for Govt. Subscribers.

• Updation of subscriber details through S2 Form.

• Conversion of non IRA to IRA compliant status. 

• Advising subscribers regarding benefits associated with PRAN being IRA compliant and updation of contact details. 

• Printing of Transaction Statement for the subscribers and distributing the same on the specific request of the subscriber. 

• Suitably rewarding/ acknowledging the best performing office/ branch/ person on completion of the NPS Service Week. 

PFRDA has also advised the CRA (NSDL) in this matter for actively assisting the Nodal Offices, POPs and aggregators in this campaign and for providing necessary guidance and further information to the employee-subscribers. This exercise is likely to help around 95 lakhs subscribers and would be available through more than 2 lakhs of points of interface comprising of Government offices , banks, non- bank Points of Presence and aggregators. 

On its part, the Pension Fund Regulatory and Development Authority is organizing the 2nd Pension Conclave in Delhi on 4th February 2016 with the theme, “Towards Universal Pension: Coverage, Adequacy and Sustainability”. All the stake holders – POPs, CRA, TB, PFs, Custodian, Nodal Officers etc are expected to participate and share their experiences. PFRDA proposes to use this occasion to acknowledge/ award the best performing banks and Post Offices in mobilization and registration of subscribers under the Atal Pension Yojana up to 31st December 2015 and institute awards for best performing POPs under the Voluntary segment of the National Pension System.

Govt. considering gratuity for NPS subscribers

Central Govt. is considering payment of gratuity for employees who joined Central Govt. service after 31.12.2003 and covered under National Pension System (Popularly known as New Pension Scheme). Till now they are not covered under the existing gratuity scheme. Only in exceptional cases like death in service, retirement on invalidation etc., provisional gratuity is being paid vide order dated 05.05.2009 as an additional benefit.

Click here for the order

Minister of State for Finance, Mr Jayant Sinha informed in parliament that Govt. is considering the benefit of gratuity to extend for the NPS subscribers too.