National Pension System (NPS): 10 Things To Know Before March 31, 2018

Under the National Pension System (NPS), the individual contributes to his retirement account.

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NDTV Profit Team
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NDTV Profit Team

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Any Indian citizen, whether resident or non-resident, between the ages of 18-60 can join the NPS, said PFRDA, that manages the NPS accounts. (Also Read: NPS, PMVVY, PPF or Senior Citizen Savings Scheme (SCSS): Which one to invest in?)
Investment in NPS is independent of your contribution to any provident fund or any other pension fund, said the pension fund regulator. (Also Read: Benefits Of NPS)
NPS is distributed through authorised entities called Points of Presence (POPs) and almost all the banks (both private and public sector) are enrolled to act as POPs under NPS apart from several other financial institutions. (Also Read: Details Of 5-Year Tax-Saving Fixed Deposits (FD) Of SBI, HDFC Bank, ICICI Bank, Axis Bank)
To invest in NPS, you will be required to open an NPS account through the POP, which will assist the subscriber in opening the account, including the filling up of necessary forms, providing the information about NPS and any other relevant information in this regard, according to pfrda.org.in, the official website of PFRDA. (Also Read: 10 Things To Know For Filing Of Income Tax Return (ITR) | New To Investments? Five Things To Know To Avoid Taking A Wrong Call)
To the POP, you need to submit a filled in subscriber registration form, proof of identity, proof of address, and age/date of birth proof.
Every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card, which has a 12-digit unique number. In case of the card being lost or stolen, the same can be reprinted with additional charges.
Under NPS account, two sub-accounts - Tier I and II are provided. Tier I account is mandatory while the subscriber has an option to opt for Tier II account.
In order to open a tier-1 account, one has to make a minimum contribution of Rs 500. The minimum contribution at the time of opening Tier II account is Rs 1,000.
The funds contributed by the subscribers are invested by PFRDA-registered Pension Fund Managers. The investment guidelines are framed in such a manner that there is minimal impact on the subscribers' contributions even if there is a market downturn.
The fund managers invest the subscribers' contributions in a judicious mix of investment instruments like government securities, corporate bonds and equities, said PFRDA.