National Pension System (NPS) - FAQs

Transcription

1 1) About NPS 1. What is National Pension System (NPS)? National Pension System is defined contribution based pension scheme is Government of India initiative to provide old age security and pension requirement of all citizen of India. The NPS was rolled out for all citizens of India on May 01, The person (employee/citizen) who joins the NPS will be known as Subscriber in the NPS. Under the NPS, each Subscriber will open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN). 2. What is meant by Defined Contribution scheme? Scheme where returns are not guaranteed are called defined contribution scheme. The return under NPS is market driven. Hence, there is no guaranteed/defined amount of return. The returns generated through investments are accumulated and is not distributed as dividend or bonus 3. What are different types of NPS Accounts? Under NPS, two types of account are available to subscribers 1. Tier - 1 NPS Account - where subscribers contribute his / her savings for retirement into a non-withdraw-able account 2. Tier - 2 NPS Account - a voluntary savings account from which subscribers are free to withdraw their savings whenever he wishes. 4. Who can subscribe in NPS? Any citizen of India including NRI in the age group of years (as on the date of submission of NPS application to Kotak Mahindra Bank branch) can join NPS. 5. What are the prerequisite for NRI to join NPS? NRI should have an account with a bank in India to open an account under NPS. The contribution made by an NRI is subject to regulatory requirements as prescribed by RBI from time to time and FEMA requirements. 6. Can an Indian citizen having dual citizenship join NPS? Yes. Till the person carries valid Indian Passport, he / she is eligible to join NPS 7. What is PRAN? PRAN is Permanent Retirement Account Number which is allotted to the subscriber by Government of India upon successful registration to NPS

2 8. What is PRAN Kit? It s a Welcome Kit containing PRAN card, Subscriber details (referred as Subscriber Master List) and an information booklet sent to the subscriber's registered address by CRA. The T-Pin and I-Pin are sent separately to the registered address. 9. What is PRAN Card? PRAN Card is a document with PRAN, subscriber s name, father's name, photograph and signature/thumb impression. This card proves the completeness of information in the CRA system. A copy of the card is required for Tier - 1I activation and also for subsequent contribution in Tier - 2 NPS Account 10. What is Subscriber Master List? The Subscriber Master List shows all the information as provided by the subscriber in his / her application and accordingly captured in CRA system. A subscriber may verify the correctness of the information submitted for registration by looking at the Subscriber Master List 11. What is the use of T-Pin? Subscribers can call at CRA's (NSDL) toll free number and access the Interactive Voice Response (IVR) or speak to customer service executive using the T-PIN (Telephonic Personal identification Number 12. What is the use of I-Pin? Subscribers can log in to CRA website using his / her unique ID and Password and access his / her NPS account details including investment details 13. Who are the intermediaries in NPS architecture and what are their roles? Below are the details of intermediaries and their roles in NPS Architecture POP (Point of Presence): POP is responsible for processing all sorts of service requests raised by the subscriber including new subscriber registration. POP acts as the first point of contact for NPS subscriber under NPS architecture. Branch offices of POP are known as Facilitation Centre (POP SP). Kotak Mahindra Bank acts as POP. Central Recordkeeping Agency (CRA): CRA is responsible for recordkeeping, servicing of customer requests, issuance of PRAN card and Welcome KIT etc. NSDL is CRA in NPS architecture. Pension Fund Manager (PFM): PFM is responsible for investment of contribution amount deposited by the subscribers. Kotak Mahindra Pension Fund Limited is Pension Fund Manager. Custodian: Stock Holding Corporation of India Limited (SCHIL) acts as Custodian in NPS architecture. The entity is responsible for NPS Trust: The Trust monitors the working of each and every entities / intermediaries operating under NPS architecture. Regulator: PFRDA Annuity Service Provider: Subscriber, post maturity of NPS Account, would buy Annuity plan of his / her choice from any of the PFRDA registered Annuity Service Providers.

3 2) New Subscriber Registration 1. What is the process of joining NPS? The subscriber needs to submit Subscriber Registration Form (Composite Application Form) to the nearest Kotak Mahindra Bank branch along with KYC documents as prescribed by PRFRDA and initial contribution amount 2. From where the Composite Application Form can be obtained? The Composite Application Form can be downloaded from the CRA website Subscribers registered under NPS Corporate Model can download the forms from the path: Organized Sector >> Corporate >> Forms Subscribers registered under NPS Unorganized Sector can download the form from the path: Individuals >> All Citizens of India >> Forms >> NPS Account Maintenance 3. Is it mandatory to open Tier 2 NPS Account at the time of opening Tier 1 NPS Account? No. Tier 2 NPS Account is optional to the subscriber. Subscriber can open Tier 2 NPS Account later on as well. 4. Can a subscriber open only Tier 2 NPS Account? No. Active Tier 1 NPS Account is a must criterion for opening Tier 2 NPS Account. Subscriber cannot apply for only Tier 2 NPS Account 5. How much time it takes for subscriber registration? After the registration forms are submitted to a Kotak Mahindra Bank s Branch, the same is sent to Kotak Mahindra Bank CPC, Mumbai office for PRAN generation. PRAN is generated and the PRAN card is printed and dispatched within 20 days from the date of receipt of duly filled registration form at Kotak Mahindra Bank CPC. 6. How can a subscriber check the status of application for registration? Subscriber needs to get in touch with the Kotak Mahindra Bank branch officials to track the status of his / her application. 7. How do subscribers come to know about his / her PRAN? Once the PRAN is generated, an alert as well as a SMS alert is sent to the registered ID and mobile number of the subscriber. For security reason, only the last four digits are mentioned in the alert. Subscribers can know the PRAN on receipt of the PRAN Kit or they can also approach Kotak Mahindra Bank branch for the same.

4 8. Whom to contact for non-receipt of PRAN Card? PRAN Card is dispatched to the registered address within 20 days from the day of PRAN generation. During this period, a subscriber can go to and check the status of PRAN kit using following path: Value added services >>> Track the status of the PRAN Card for NPS regular Subscribers can also write to info.cra@nsdl.co.in to get the information on the same. 3) Charges under NPS 1. What are the charges under NPS Below are the details of charges under NPS Intermediary Charge Head Charge# POP Subscriber Registration Charge Rs.100 Contribution Processing Charge* 0.25% Non Financial Transaction Processing Charge Rs.20 CRA Account Opening Charge Rs.50 Transaction Processing Charge Annual Maintenance Charge Rs.5 Rs.225 PFM Fund Management Charge 0.25% Custodian Security Deposit Charge % *subject to minimum Rs.20 and maximum Rs per PRAN per Transaction #exclusive of Service Tax 2. What is the mode of deduction of charges? Below is the snapshot of mode of deduction of each charge Intermediary Charge Head Mode of Deduction POP Subscriber Registration Charge To be collected up fron Contribution Processing Charge*

5 Non Financial Transaction Processi Charge CRA Account Opening Charge Through cancellation Units Transaction Processing Charge Annual Maintenance Charge PFM Fund Management Charge Through NAV deduction Custodian Security Deposit Charge 3. Does subscriber need to pay POP charges over and above the contribution amount? In general the POP charges are deducted from the contribution amount deposited by the subscriber. For example, if a subscriber has opted for Tier 1 NPS Account has deposited Rs.1000 as initial contribution, POP will deduct the following charges Subscriber Registration Charge: Contribution Processing Charge: Rs (Rs ST) Rs (Rs.20 + ST) The balance amount Rs (Rs.1000 Rs Rs.22.47) will be send for investment in Tier 1 NPS Account of the subscriber. 4. Is there any charge applicable for Tier 2 NPS Account opening? There is no charge for opening Tier 2 NPS Account if subscriber has opted this account at the time of opening Tier 1 NPS Account. However, if the subscriber opts for Tier 2 NPS Account at a later stage, Rs.20 plus Service Charge would be applicable 5. What is meant by Non Financial Transaction Charge? Apart from contribution processing, subscriber is allowed to do below transactions as well which are known as Non Financial transactions Switch from one sector to another Withdrawal from Tier 2 NPS Account Change of Scheme Preference, Fund Manager and Asset Allocation Pattern Activation of Swablamban Scheme Modification of Subscriber details like Change in Name, Change in Nominee, Change in Address etc. Request for Re-issue of I-Pin / T-Pin Shifting of Subscriber from one POP to other POP Re-printing of PRAN Activation of Tier 2 NPS Account

6 Switching the amount from Tier 2 NPS Account to Tier 2 NPS Account Modification of Photograph / Signature of the subscriber Request of unfreezing of NPS Accounts 6. Does the Transaction Processing Charge under CRA head applicable for both Financial and Non Financial Transaction requests? Yes. Rs.5 plus Service Tax will be applicable for any kind of transaction request raised by the subscriber. 7. How is the Non Financial Transaction Charge recovered by POP? Subscriber needs to pay Rs.20 + Service Tax in Cash at the time of submitting request for process any Non Financial transaction 4) Contribution / Financial Transaction 1. What is the initial contribution amount? Subscriber needs to pay minimum contribution amount depending on what type of account he / she has opted for i. Rs.500 if the subscriber has opted only for Tier - 1 NPS Account ii. Rs.1500 if the subscriber has opted to activate his Tier - 2 NPS Account Subscriber can pay the contribution in the form of Cash / Cheque / Demand Draft / Fund Transfer (only SI) 2. What process subscriber needs to follow to make contribution to NPS Account? To contribute in Tier - 1 and Tier - 2 NPS Account, the subscriber needs to deposit the contribution amount along with duly filled NCIS (NPS Contribution Instruction Slip) to any Kotak Mahindra Bank branch 3. What is the minimum contribution amount for subsequent transaction for Tier - 1 and Tier - 2 NPS Accounts? i. Tier - 1 NPS Account: Rs.500 ii. Tier - 2 NPS Account: Rs Are there any minimum annual contribution requirement for Tier - 1 and Tier - 2 NPS Accounts? Yes. Minimum annual contribution amount for Tier - 1 and Tier - 2 NPS Accounts as defined by PFRDA is as under i. Tier - 1 NPS Account: Rs.6000 ii. Tier - 2 NPS Account: Rs.250. For Tier - 2 NPS Account, minimum unit holding at the end of FY should be Rs.2000.

7 5. Is there any restriction in frequency of contribution? There is no restriction in terms of frequency of contribution. Subscriber has the option to make the contribution in any mode monthly, quarterly, half yearly or yearly. Also, subscriber can make ad hoc contribution as well. 6. Is there any restriction on amount to be invested in NPS? No, there is no restriction in contribution limit. 7. Can subscriber increase or decrease the contribution amount in subsequent year? NPS offers this flexibility. Subscribers are allowed to alter the contribution amount as per the suitability. 8. What is the TAT for credit of units to subscriber s Tier - 1 / Tier - 2 NPS Account? The TAT for credit of units to subscriber s Tier - 1 / Tier - 2 NPS Account can range up to 15 working days for initial contribution and 7 working days for subsequent contributions after the clear funds are realized in Kotak Mahindra Bank account. 9. Does subscriber get any alert on credit of contribution amount to his / her NPS accounts? Yes, once the contribution is credited to subscriber s NPS account, an alert as well as a SMS alert is sent to the registered ID and mobile number of the subscriber 10. Is third party contribution acceptable in Tier - 1 / Tier - 2 NPS Account? Yes, someone else may make contribution to Tier - 1 / Tier - 2 NPS Account of a subscriber. It is recommended, that the contribution is made by the concerned subscriber e.g., Cheque in the name of the subscriber 5) Non fulfillment of required contribution criteria and implication 1. What happens if the subscriber does not pay the initial contribution amount at the time of registration? It is advisable that subscriber pays the initial contribution amount depending on the type of account he / she has opted for. In case the contribution amount is not credited in subscriber Tier - 1 / Tier - 2 NPS Account within two months of account opening, the account would be deactivated. If the account is deactivated, subscriber will not be allowed to do any transaction in his account.

8 2. What happens if the minimum contribution of Rs.6000 is not made in Tier - 1 NPS Account? In case the subscriber fails to contribute minimum Rs.6000 in Tier - 1 NPS Account, the PRAN is frozen. Once the PRAN is frozen, subscriber is not allowed to do any transaction (financial / non financial) in both - Tier - 1 and Tier - 2 NPS Accounts. 3. How can a subscriber unfreeze the PRAN? The subscriber should pay prescribed minimum contributions due for entire period of dormancy (Rs.6000 (less) amount already contributed in the financial year) calculated for each year plus Rs. 500 for the current financial year plus penalty of Rs. 100 for each financial year of freeze Illustration If a subscriber has made following contributions in the last three consecutive financial years: FY 09-10: Rs.2500; FY 10-11: Rs.2200; FY 11-12: Rs.1350 Calculation for total amount required for unfreezing the PRAN Financial Year Contribution made by the subscriber Minimum contribution required for the year Defaulted contribution FY FY FY Total Contribution for FY 12-13: Rs.500 (minimum contribution required for Tier - 1) Penalty Amount: Total amount to be paid: Rs.300 (Rs.100 * 3) for three years of default Rs (Rs Rs Rs.300) POP Charges to be paid over and above this amount 4. What happens if the unit holding as on 31 st March in the Tier - 2 NPS Account is not Rs.2000? Tier - 2 NPS Account would be frozen. The subscriber would not be allowed to do any transaction in his / her Tier - 2 NPS Account 5. How can the subscriber unfreeze Tier - 2 NPS Account? Subscriber needs to submit request for unfreezing the Tier - 2 NPS Account along with the amount required to unfreeze the Tier - 2 NPS Account. The amount required to unfreeze the account would be difference between the amount lying in the account as on date of freezing and Rs.2000 plus Rs.250 (minimum contribution for the current financial year) plus Rs.100 as penalty for each year

9 Illustration: The subscriber has opened Tier - 2 NPS Account in the FY Since then, he has not met criteria and the Tier - 2 NPS Account is frozen. The value of asset holding is Rs in Tier - 2 NPS Account as on 31st March 2012 Amount required for unfreezing the Tier - 2 NPS Account: Rs.1300 (Rs.750 (difference between unit value and Rs.2000) + Rs.300 (Penalty of Rs.100 for three years) + Rs.250 (minimum contribution required for current FY)) POP Charges to be collected over and above this amount 6. Does Tier - 1 NPS Account of the subscriber also get frozen if Tier - 2 NPS Account is frozen? No, Tier - 1 NPS Account will get frozen only in case minimum criteria is not fulfilled for Tier - 1 NPS Account 6) Investment Options 1. What are the fund options available under NPS? Below mentioned three fund options (also known as asset classes) are available under NPS i. Equity Fund (E) ii. iii. Government Securities Fund (G) Corporate Bond Fund (C) 2. Can a subscriber invest 100% of contribution to Equity Fund? Under Equity Fund option, subscriber is allowed to invest only up to 50% of contribution amount. 3. Can a subscriber invest 100% in Government Securities or Corporate Bond Fund? Yes, subscriber can invest 100% of contribution to Government Securities or Corporate Bond Fund. 4. Can a subscriber select different Asset Allocation Pattern for Tier 1 and Tier 2 NPS Accounts? Yes. Subscriber can have different asset allocation patterns for both the accounts. 5. What are various Scheme Preferences available under NPS? NPS offers two Scheme Preferences to subscribers Active Choice and Auto Choice. i. Active Choice: Under this option, subscriber selects the allocation pattern amongst the three funds E, C and G. ii. Auto Choice: Under this option, subscriber funds are automatically allocated amongst three funds E, C and G in a per pre-defined portfolio pattern prescribed by PFRDA.

10 Age E (% C (% G (% Age E (% C (% G (% < = > = As the subscriber grows old, the investment is shifted more towards secured fund option Government Securities. 6. Can a subscriber select different Scheme Preferences for Tier 1 and Tier 2 NPS Accounts? Yes. Subscriber can have different asset allocation patterns for both the accounts 7. What happens if the exposure in Equity Fund crosses the 50% threshold at any given point of time under Active Choice Scheme Preference option? In case of excessive market performance where corpus in Equity Fund breaches the 50% threshold, system driven Auto Rebalancing of Portfolio technique is carried out on next date of birth of the subscriber. With this technique, units worth excessive corpus is redeemed from the Equity fund corpus of the subscriber and allocated to other Funds (Government Securities and Corporate Bonds) in the same pattern as last selected by the subscriber. 8. How the Auto Rebalancing of Portfolio technique work under Auto Choice Scheme Preference? The same is system driven technique and is carried out on the next date of birth of subscriber. Units worth excessive corpus (considered as per the age of the subscriber) is redeemed from the Equity fund corpus of the subscriber and allocated to other Funds (Government Securities and Corporate Bonds) in the same pattern defined for that age.

11 7) Account Maintenance 1. Can a subscriber change / modify in PRAN data? Yes. A subscriber can request for change / correction in personal details, nomination details, bank details, reissue of I-Pin/T-Pin/PRAN Card to the Kotak Mahindra Bank branch. A subscriber can also update his / her photograph and signature by submitting written request to Kotak Mahindra Bank branch 2. From where the forms for service requests can be obtained? The Composite Application Form can be downloaded from the CRA website Subscribers registering under NPS Corporate Model can download the form from the path: Organized Sector >> Corporate >> Forms >> Form for registration of Subscriber (CS S1) Subscriber registering under NPS Unorganized Sector can download the form from the path: Individuals >> All Citizens of India >> Forms >> Subscriber Registration >> Form UOS S1: Composite application form for subscriber registration 3. From where a subscriber can download Kotak Mahindra Bank branch details? Kotak Mahindra Bank branch details are updated on Kotak Mahindra Bank website. Please navigate through the following URL to get details of Kotak Mahindra Bank branches: 4. Can a subscriber view the status of its request of change / modify in PRAN data? Yes, subscriber can check with the Kotak Mahindra Branch or can call at CRA's toll free number for the status of pending request. Subscriber can also login to using the I-PIN and check the status 5. Can a subscriber request for a duplicate PRAN Card? Yes. In case of loss or damage of PRAN Card, the subscriber needs to submit a duly filled S2 form to the Kotak Mahindra Bank branch for issuance of duplicate PRAN Card. Subsequently, the request is processed by CRA and a fresh PRAN Card is printed and sent to subscriber's registered address. This is a chargeable transaction 6. Does CRA charge for PRAN Card Re-print? Yes, the charge is Rs.50 plus applicable Service Tax. The charge gets deducted by unit cancellation. 7. Can a subscriber change asset allocation pattern for Tier - 1 / Tier - 2 NPS Account? Yes. A subscriber can request for a change in asset allocation once in a financial year for each of Tier - 1 and Tier - 2 NPS Account. In case the Subscriber wants to change Asset Allocation for both the Tiers then he / she should submit separate forms for each Tier

12 8. Can a subscriber change the scheme preference? Yes. The subscriber can change the scheme preference once in a financial year for both Tier - 1 and Tier - 2 NPS Accounts. In case the Subscriber wants to change Scheme Preference for both the Tiers then he / she should submit separate forms for each Tier 9. Can a subscriber change the Pension Fund Manager? Yes, subscriber can change the Pension Fund Manager for both Tier - 1 and Tier - 2 NPS Accounts once in a year. In case the Subscriber wants to change Pension Fund Manager for both the Tiers then he / she should submit separate forms for each Tier 10. Do subscribers get any physical statement for NPS account? Yes. An annual statement containing details of the unit holdings is issued by CRA to subscriber s registered address within 3 months of the end of every financial year 11. How does subscriber get its Statement of Transaction (SOT) on ad-hoc basis? Subscriber can get Kotak Mahindra Bank branch to obtain the account statement. Subscriber can also view / print the SOTs by logging into CRA website using the I- PIN 8) Withdrawal from Tier - 1 and Tier - 2 NPS Accounts 1. When and how can a subscriber withdraw from Tier - 1 NPS Account? In general withdrawal from Tier - 1 NPS Account is restricted till the subscriber attains the age 60. On attaining the age of 60 years, subscriber would be required to invest minimum 40% of accumulated corpus (pension wealth) to purchase a life annuity from any IRDA - regulated life insurance company registered with PFRDA. A subscriber may choose to purchase an annuity for an amount greater than 40%. Subscriber can withdraw the remaining pension wealth in a lump sum either at the age 60 or at any point of time before he / she attains the age What will happen to NPS accounts after the subscriber attains the age 60. Both Tier - 1 and Tier - 2 NPS Accounts would be closed. Subscriber will not be allowed to make any further contribution in either of the accounts. Amount lying in the Tier - 2 NPS Account is transferred from the Trustee Bank to subscriber's bank account as registered in the CRA system 3. What happens to the funds if subscriber opts for late withdrawal (after the age 60) The fund would continue to remain invested. The Pension Fund Manager, Scheme Preference and Asset Allocation Pattern will remain the same as these were at the time of vesting.

13 4. Is subscriber allowed to exit from NPS before attaining the age 60? If a subscriber wishes to exit from NPS before attaining the age of 60, he/she can withdraw up to 20% of the sum accumulated till that point of time. The subscriber has to buy annuity with the rest of the money. The RPAN will be closed and subscriber will not be allowed to subscribe in NPS further. 5. What process subscriber needs to follow for withdrawal from Tier - 2 NPS Account? In order to withdraw from Tier - 2 NPS Account, the subscriber needs to submit a duly filled UOS- S12 form to the associated Kotak Mahindra Bank branch. 6. What is the TAT for redemption from Tier - 2 NPS Account? After the request is processed in CRA system by Kotak Mahindra Bank on T+3 days, (T being the date of processing) the funds are transferred from the Trustee Bank to subscriber's bank account as registered in the CRA system. Units are redeemed based on the NAV declared at the end of the processing day. 9) Annuity 1. In case the subscriber opted for withdrawal from Tier 1 NPS Account before the age 60, at what age annuity will start? Subscriber needs to buy annuity plan immediately irrespective of his / her age. 2. Can a subscriber change the annuity service provider? No, this option is not available. 3. Is subscriber allowed to use 100% of accumulated wealth to buy annuity plan? Yes. Subscriber can use 100% of accumulated wealth to buy annuity plan 4. In case of death of subscriber, what happens to the annuity plan bought by him / her? It will depend on the kind of annuity plan opted for the subscriber. For an example, if the annuity plan is joint life annuity plan, on death of subscriber, the spouse will get the annuity till he / she is alive 10) Death Proceedings 1. In case of death of the subscriber, who can claim the corpus in Tier - 1 and Tier - 2 NPS Accounts of diseased? In case of death of the subscriber, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. In case, nominee is not there legal heir to the subscriber can claim the corpus.

14 2. What is the process of claiming the corpus after death of the subscriber? The beneficiary needs to submit a withdrawal request to Kotak Mahindra Bank branch for processing the request. After the request is processed, a Cheque is issued favoring the beneficiary and forwarded to the Kotak Mahindra Bank branch by CRA, which can be collected by the beneficiary 3. What happens if the subscriber dies after attaining the age 60? The mode and manner of payment of amount (if any available) will depend on the type of annuity plan / scheme selected by the subscriber while buying the annuity 11) Grievance Management 1. What is the process of registering grievance / complaint? Subscriber can raise a grievance i. Through Call Centre using T-PIN or ii. Through CRA website using I-PIN. iii. By contacting Kotak Mahindra Bank branch, who can also raise a grievance on his/her behalf. iv. By forwarding duly filled G1 Form to CRA 2. How does a subscriber know the status of the grievance lodged by him / her? When a subscriber registers a grievance in the CRA website ( a unique token number is assigned to each and every grievance. Subscriber can use that token no. to know about the status of the grievances either through the call center or through the CRA website 3. How does the grievance get resolved? Whenever a subscriber raises a grievance, a system generated alert goes to the entity against which the grievance is raised. The respective entity then resolves the grievance and post resolution details in CRA system 12) Important for Corporate Sector Subscribers 1. Is the Subscriber Registration Form different for the corporate sector? Yes. Subscriber under corporate sector needs to fill CS S1 form. The form must be attested by authorized signatory of the corporate before submitting it to Kotak Mahindra Bank branch. 2. In which account (Tier - 1 / Tier - 2) corporate contribution would be processed? Corporate contribution would be processed in Tier - 1 NPS Account only.

15 3. Is it mandatory for the employee to contribute on his own in Tier - 1 NPS Account along with corporate contribution? This is not mandatory. It a choice of individual subscriber to contribute to Tier - 1 NPS Account over and above the contribution made by the employer. However the subscriber needs to ensure that minimum incremental contribution (including corporate contribution) in Tier - 1 NPS Account for the financial year is Rs If the corporate has already selected Pension Fund Manager, Scheme Preference and Asset Allocation, will employee be allowed to select a different Pension Fund Manager, Scheme Preference and Asset Allocation? No. If the corporate has selected a Pension Fund Manager under Corporate Option, contribution (individual + corporate) of all the employees would default goes to that PFM only 5. If the corporate has selected Pension Fund Manager, Scheme Preference and Asset Allocation under NPS Corporate Sector Model, will this be applicable for Tier - 2 NPS Account as well? No, the same will be applicable only for Tier - 1 NPS Account 6. If the employee is on leave without pay, then will the 10% of Basic + DA clause for corporate contribution applicable for actual working days or for full year? The 10% clause is applicable on actual Basic + DA salary an employee gets from the employer. In case of leave without pay, his / her actual Basic + DA salary is reduced and the 10% clause would be applicable on reduced salary 7. If the employee has left immediately and three months salary is given as settlement, how corporate contribution towards NPS can be made? Since, the settlement amount is going to be treated as salary for the employee, NPS contribution from the corporate can be done as per the normal process 8. What happens if the employee changes the employment? The responsibility of account maintenance remains with the subscriber (employee) only. i. If the next employer is not registered with NSDL for NPS: Employee would require to contribute to the Tier - 1 NPS Account on his / her own ii. If the next employer is registered with NSDL for NPS: Employee needs to submit duly filled and certified Subscriber Employment & Scheme Change Form to the POP with whom the next employer has tied up for NPS. Once the employment details are changed in the CRA system, the same can be communicated to the next employer for processing corporate contribution 9. If the retirement age of the corporate is less than 60 years, can subscriber access to his fund on retirement age? If the retirement age in a corporate is less than 60 years, corporate contribution would stop coming to Tier - 1 NPS Account of the employee. In such cases, employee will require to infuse minimum Rs.6000 annual contribution till he / she attains the age 60 to keep the PRAN active

16 Once the employee attains the age 60, he / she can opt for withdrawal of account as defined earlier 10. What are the tax benefits available to employees for contribution under corporate model? Under NPS corporate model, subscriber gets the following tax benefits on contributions i. Tax Benefits on Employer s Contribution: Contribution made by the Employer to the extent of 10% of Basic and DA Salary of the employee is deductible from taxable income under section 80CCD (2) of Income Tax Act 1961 ii. Tax Benefits on Employee s Contribution: Employee can also contribute to his / her Tier - 1 NPS Account. This contribution is deductible from taxable income under section 80C