NPS Monthly Bulletin. Volume V Issue I. Pension Fund Regulatory Development Authority

Transcription

1 NPS Monthly Bulletin Volume V Issue I Pension Fund Regulatory Development Authority 1 st Floor, Chhatrapati Shivaji Bhawan, B-14/A,Qutab Institutional Area, New Delhi

2 Table of Contents Page No. Section 1: About National Pension Scheme & Intermediaries...2 Section 2: NPS Statistics...6 Section 3: Monthly Updates...8 Section 4: NPS related Circulars & Notices Section 5: Press Releases Section 6: Macro-economic Statistics

3 Section 1: About National Pension Scheme & Intermediaries NATIONAL PENSION SYSTEM National Pension System (NPS) earlier known as New Pension Scheme (NPS) was launched with effect from 1st January, 2004 and in the initial phase covered the new entrants to the Central Government services as well as State Government and Central Autonomous bodies. NPS was extended to all other citizens of India from 1st May, 2009 with the objective to extending old age income security coverage to all the citizen. It is an important milestone in the development of a sustainable and efficient voluntary defined contribution pension system in India. NPS ARCHITECTURE Pension Fund Regulatory and Development Authority (PFRDA) originally established by the Government of India through a resolution dated 10 th October, 2003 which was reissued on 14 th November 2008, has since attained a statutory status post the passage of Pension Fund Regulatory and Development Authority Act, 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 pension funds and for matters connected therewith or incidental thereto. PFRDA has established the institutional framework and infrastructure required for administering and regulating the National Pension System (NPS) for government employees as well as other citizens of India. Various institutional entities such as Central Recordkeeping Agencies (CRAs), Pension Fund Managers (PFMs), Trustee Bank (TB), Custodians, Annuity Service Providers (ASPs) and National Pension System Trust (NPST) have been appointed and are functional. 2

4 NPS INTERMEDIARIES NPS Trust National Pension System Trust (NPST) was established by PFRDA as per the provisions of the Indian Trusts Act of 1882 for taking care of the assets and funds under the NPS in the best interest of the subscribers. NPS Trust is the registered owner of all assets under the NPS architecture. The securities are purchased by Pension Fund Managers on behalf of, and in the name of the NPS Trust, however individual NPS subscriber remain beneficial owner of the securities, assets and funds. NPS Trust is also responsible to monitor the performance of custodian, Pension Fund Managers and Trustee Bank with a view to protecting the interest of subscribers. Central Recordkeeping Agency (CRA) Central Recordkeeping Agency undertakes the recordkeeping, administration and customer services, issue of Permanent Retirement Account Numbers (PRANs) to each subscriber, maintaining the database of all the subscribers and recording transaction relating to each subscriber. NSDL e-governance Infrastructure Ltd. has been appointed as CRA for the NPS. In addition to this, the role, responsibility and accountability of the CRA are as follows: - Setting up and operating the system including the separate Government Office interface of NPS Central Accounting Network (NPSCAN). 3

5 NPS Trustee Bank -Acting as operational interface for all intermediaries under CRA system which includes interaction, liasoning with all necessary external agencies to accomplish the operations and commissioning as per contract terms and conditions. - Monitor subscribers contributions and instructions and transmit the information to the relevant Pension Fund Managers and schemes on a daily basis. - Provide web based access to PFRDA and other service providers like Trustee Bank, Government departments, Pension Fund Managers and Annuity Service Providers. - Facilitate in providing various subscriber maintenance services such as change of scheme, change of demographic details, grievance handling etc. Provision of sms / alerts to the subscribers for status updates and transactions. - Facilitate withdrawal of funds on superannuation/ pre-mature withdrawals on death of the subscribers by providing information on ASPs, annuity schemes and the percentage allocation of funds in the annuity product by the subscriber. - Provide a Centralised Grievance Management System (CGMS) which is a platform where grievances are forwarded to the concerned entity and resolution status is updated. - Conduct periodic orientation programmes for nodal offices and subscriber awareness programs about the NPS and the process. NPS Trustee Bank facilitates pooling up of funds from the subscribers through nodal offices, POPs etc. and then transfer across to PFMs and ASPs. Axis Bank Ltd has been appointed by PFRDA as the Trustee Bank for National Pension System (NPS) on 25 th April, 2013 and has been effective from 1 st July, Pension Fund Managers (PFMs) PFMs are appointed to manage the retirement savings of subscribers under the NPS and APY and manage the funds as per the investment guidelines prescribed by PFRDA and the investment pattern opted by the subscribers and communicate the NAV of each scheme to CRA on regular basis. Point of Presence (POPs) Points of Presence act as the customer interface for non-government subscribers / individual citizens who wish to open Permanent Retirement Account (PRA) with CRA for the purpose of subscribing to the NPS. They have authorized branches (POP-SPs) for accepting applications and contributions. The POP-SPs are also responsible for proving a wide range of services to NPS subscribers, as prescribed by PFRDA from time to time. 4

6 Aggregators Aggregators are the entities registered with PFRDA to function as subscriber interface for NPS Lite/Swavalamban under NPS architecture. Aggregators perform the functions relating to registration of subscribers, undertaking KYC verification, receiving contributions and instructions from subscribers and transmission of the same to the Trustee Bank and CRA respectively. In the recently launched APY scheme, all Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enrol subscribers through architecture of National Pension System. The banks, as POP may employ BCs/Existing non - banking aggregators, micro insurance agents, and mutual fund agents as enablers for the last mile outreach to the prospective subscribers. The banks may share the incentives received by them from PFRDA/Government with BCs/Aggregators, as deemed appropriate. Annuity Service Providers (ASPs) ASPs are life insurance companies empaneled with PFRDA responsible for delivering a regular monthly pension to the subscriber for the rest of his/her life. On receipt of specified sum along with personal and banking information details of subscriber from CRAs, the ASP through its access codes confirms receipt. ASP then initiates payment of annuities to the subscriber. Custodian The custodian provides custodial services to the Pension Fund Managers and ensures that benefits due on the holdings are received, provides detailed information and other reports as required by the NPS Trustee Bank, maintains confidentiality of the transactions and is responsible for any loss or damage to the assets belonging to the Pension Funds due to negligence on its part or on the part of its approved agents. The Custodian shall not assign, transfer, hypothecate, pledge, lend, use or otherwise dispose off any assets or property of the Fund, except pursuant to instruction from the Trustee. 5

7 Section 2: NPS Statistics i. NPS-Growth of subscribers and Asset under Management for January, 2016 The number of subscribers under NPS and APY increased from lakh as end of December 2015 to lakh as on January 2016 i.e. by 1.97% during the month of January, 2016 supported by 3.61 % growth in unorganised sector and 9.01 % growth in Atal Pension Yojana. The table depicting the same is as under: Sector Number of Subscriber As on Number of Subscriber As on Absolute increase over the month % Growth Over the month Central Government 1,601,200 1,615,198 13, State Government 2,841,248 2,866,604 25, Pvt. Sector 561, ,939 20, NPS Lite* 4,464,268 4,463, Atal Pension Yojana 1,813,547 1,976, , Total 11,281,941 11,503, , * Fresh/new registration under NPS Lite has been stopped w.e.f. 01 st April 2015 The AUM under NPS increased from Rs. 107, 802 crore as end of December 2015 to 109,642 crore as end of January 2016 i.e. by 1.65% during the month of January The highest growth in AUM is witnessed in Atal Pension Yojana followed by Private sector as shown in the table below: (Rs. cr) Sector AUM (as on ) AUM (as on ) Absolute increase over the month % Growth Over the month Central Government 44,752 45, State Government 51,913 52,920 1, Pvt. Sector 8,887 9, NPS Lite* 1,988 1, Atal Pension Yojana Total 107, ,642 1, * Fresh/new registration under NPS Lite has been stopped w.e.f. 01 st April 2015 ii. Sector wise share of subscribers, corpus and AUM are given in the following table It may be seen that share of Government subscribers in NPS is 39.0 % whereas it accounts for nearly 90 % of the AUM. The corporate and unorganised sector accounts for 5.1 % of the subscriber and 8.3 % of the AUM. The NPS Lite including APY accounts for 56 % of the subscribers but only for 2.1% of the AUM. 6

8 Sector wise share of subscribers, corpus and AUM are given in the following table: (as on ) Sector Number of Subscribers (% of Total) Total Assets Under Management (% of Total) Central Government State Government Total Corporate Unorganized Total NPS Lite APY Total Grand Total iii. Overall Status of State Governments 26 States have joined NPS. As on 30th January, 2016, Uttar Pradesh has the highest number of subscribers enrolled under NPS followed by Madhya Pradesh and Chhattisgarh. In terms of assets under management (AUM), Rajasthan has the highest AUM of Rs crore followed by Madhya Pradesh and Maharashtra. Tamil Nadu has already notified NPS but is yet to adopt NPS architecture. Employees and employers NPS contributions are retained by the State Government instead of passing on to the NPS architecture for management by professional fund managers as per the investment guidelines prescribed by the Pension Fund Regulatory and Development Authority. West Bengal and Tripura are yet to notify NPS. State wise position of date of adopting the NPS, number of subscribers, corpus and the Assets under Management are given in the following table: 7

9 # State Govt. Date of Notification Date of Adoption Total No. of Subscriber (As on 30 th January, 2016) Contribution AUM M&B (Cr) (Cr) 1 Andhra Pradesh Arunachal Pradesh Assam Bihar Chandigarh** Chhattisgarh Goa Gujarat Haryana Himachal Pradesh J & K Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Puduchery** Punjab Rajasthan Sikkim Telangana Uttarakhand Uttar Pradesh Tamil Nadu Tripura* No No West Bengal* No No Total ,66,604 45, , * Executed agreement with CRA and NPS trust only for AIS officer. ** Chandigarh and Puducherry status is included under the state government Status. *** IRA compliance in State Government is 90.02%. 8

10 iv. UoS Sector in NPS 67 PoPs with 54,923 service providers are registered with PFRDA to provide services to citizens under the NPS. While the registration and contribution upload of Government and Government bodies employees is done by their respective Pay & Account offices, the private and the unorganised sector employees are serviced through the PoPs. As on January 30, 2016, 1,34,498 subscribers have been registered under the private and unorganised sector other than the NPS Lite and APY. The contribution from unorganised sector as on January 30, 2016 was Rs. 648 crore against which AUM of the sector was Rs. 704 crore. Number of subscribers registered under NPS Tier II are 30,398. The contribution received from Tier II subscriber is Rs. 147 crore and the AUM is Rs. 149 crore. a) Total number of registered PoPs 67 b) Total number of registered PoP-SP 54,923 Tier I c) Total No. of subscribers 1,34,498 d) Total amount of subscribers contribution M&B Rs. 648 Crore e) Total Asset Under Management Rs. 704 Crore Tier II f) Total no. of subscribers 30,398 g) Total amount of subscribers contribution Rs. 147 Crore h) Total Asset Under Management Rs. 149 Crore v. Corporate Sector in NPS As on 30 th January 2016, 2,208 Corporates with 4,50,135 subscribers are registered under NPS. The contribution received from the corporate subscribers as on 30th January, 2016 was Rs Crore against which the AUM was Rs Crore. a) b) (As on January 30, 2016) Total number of corporate registered in NPS 2,208 Total number of subscriber registered in Corporate Sector 4,50,135 c) d) Contribution amount Total Asset Under Management Rs. 7,291 Crore Rs. 8,295 Crore 9

11 vi. Atal Pension Scheme statistics The subscriber base of newly launched Atal Pension Yojana has reached to lakh as on January 30,2016 and AUM under APY have reached to Rs. 328 crore. (As on 30 th January, 2016) a) Number of Banks registered under APY 359 b) Number of subscribers registered 19,76,937 c) Asset Under Management Rs. 328 Crore vii. PFM wise Returns on NPS Schemes 1. One year return (in %) Pension Funds SBI UTI LIC KOTAK Schemes CG SG Corporate-CG TIER I TIER II (as on 30 th January 2016) RELIANC E ICICI HDFC E C G E C G NPS Swavalamban Returns since inception (in %) (as on 30 th January 2016) Pension Funds SBI UTI LIC KOTAK RELIANCE ICICI HDFC Schemes CG SG Corporate-CG E TIER I C G E TIER II C G NPS Swavalamban

12 Section 3: Monthly Updates Educating and making people aware of the benefits of the retirement planning and creating awareness about the pension schemes regulated by PFRDA is critical for increasing participation in the voluntary segment of NPS and other pension scheme regulated by PFRDA. Towards this end, the role of an advisory entity is considered critical in propagating the schemes to the masses in order to achieve adequate social security. This requires penetration at the grass root level. Retirement Advisers, with adequate knowledge of prospects needs and means, and knowledge of the pension products and process, will be in a better position to advise individuals, who have different levels of education, financial literacy, wealth, income potential, capacity to save and financial goals. Retirement Adviser can play a significant role in helping the prospects/subscribers in deciding retirement plans. Accordingly, PFRDA is in the process of framing suitable Regulations for Retirement Advisers. The objective of the Retirement Adviser Regulations is to provide a framework for eligibility, registration process, fees etc. of Retirement Adviser and to define the scope of work and responsibility of the Retirement Adviser. Towards this end, the Authority has prepared a Draft Regulations which has been placed on the website of PFRDA for stakeholders and public comments. Section 4: NPS related Circulars & Notices i. Revised Guidelines in respect of Contribution Collection and Service Charges for opening NPS accounts for NRIs With a view to promote NPS among Non-Resident Indians (NRIs), through Points of Presence (POPs) the following changes have been made in the service charge structure and contribution collection. A. Service Charge structure applicable to POPs for NPS accounts for NRIs sourced and serviced abroad : Intermediary Charge Head Service Charges Method of Collection POP Initial Subscriber Registration USD 8 or Equivalent in local currency. To be Collected Upfront 11

13 Initial Contribution & all Subsequent Contribution USD 1, or Equivalent in local currency or 1%, whichever is higher subject to maximum of USD 8 or Equivalent in local currency. All Non-Financial Transaction USD 1 or Equivalent in local currency. (i) Charges for all other intermediaries remain the same. (ii) For NPS account of NRIs sourced domestically but serviced abroad, i.e. contribution and other non-financial transactions being done abroad by the POP, the charge for overseas servicing would apply. (iii) For NPS account of NRI sourced overseas but serviced in India i.e. contribution and other non-financial transaction being done in India, the charge for domestic servicing under the existing All Citizen Model would apply. (iv) The contribution amounts shall be paid by the NRIs either by inward remittance through normal banking channels or out of funds held in their own NRE/FCNR/NRO account. B. Contribution structure for NPS Accounts when serviced abroad would be as under: Particulars Tier I Tier II Minimum Contribution at the time of account opening Rs.6,000/- Rs.2,000/- Minimum amount per contribution Rs.2,000/- Rs.2,000/- Minimum contribution in a financial year Rs.6,000/- Rs.2,000/- Minimum frequency of contributions per financial year 1 1 While servicing these accounts domestically, the contribution criteria will remain the same as applicable to the existing NPS A/cs under the All Citizen Model. 2. Once the NRI status of the subscriber changes to Resident status, the subscriber will inform the same to CRA/POP for updating the same in the CRA system. 12

14 ii. Notice inviting application for registration of Point of Presence under PFRDA (PoP) Regulations, 2015 PFRDA has invited applications from for registration of Point of Presence (PoP) under PFRDA (PoP) Regulations The basic details regarding eligibility criteria, guidelines, regulations and application form for PoP registration are available at PFRDA website iii. Extension of time line upto March 31, 2016 for Government Co-contribution under Atal Pension Yojana (APY) To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, the Government had launched a new initiative called Atal Pension Yojana (APY) with effect from 1st June, Under the APY, the Central Government s co-contribution of 50% of the total contribution, subject to a maximum of Rs per annum, was available to each eligible subscriber, for a period of 5 years, i.e. from to , who join APY before 21st December After careful consideration of feedback received from various quarters, the Government has decided that the co-contribution by the Central Government of 50% of the total prescribed contribution subject to maximum of Rs per annum, will be available for those eligible subscribers who join APY before March 31, The measure is likely to benefit substantial number of people who have not been able to join APY and therefore have failed to avail the benefit of co-contribution by the Government. iv. No new/fresh enrolment in NPS Lite/Swavalamban Consequent upon the launch of the Atal Pension Yojana, the Swavalamban Scheme were discontinued. A notice has been issued by PFRDA in the interest of general public informing that new/fresh enrolments under NPS-Lite/Swavalamban have been stopped with effect from 1st April, However, the subscribers already registered under NPS-Lite/Swavalamban prior to can continue to deposit their subsequent contributions through their respective aggregators registered with Pension Fund Regulatory and Development Authority (PFRDA). General public were advised to exercise due caution and not deal with or give any contribution/sums of money or documents to any entity/individual for fresh enrollment under NPS-Lite/Swavalamban. If any person/entity approaches the members of the general public seeking to provide fresh/new enrolment under the since ceased NPS-Lite/Swavalamban, the same may be reported to PFRDA and also to local police authorities. 13

15 v. Warning against entities indulging in fraudulent activities under NPS Lite / Swavalamban It has been reported that some unauthorized entities are illegally carrying out the NPS- Swavalamban related activities by issuing application forms, collecting funds from general public. These entities are also alleged to be using the National Emblem and PFRDA logo on their marketing material to misguide the general public. Through a notice by PFRDA it is informed to the public that this Authority has not authorized any entity to display the PFRDA s logo or the National Emblem either on its promotional material or any other document, nor have such entities been authorized by PFRDA, in any manner to operate the Swavalamban scheme. Further fresh enrolment under the Swavalamban scheme has been discontinued on the directions of the Government of India w.e.f 01 st April Through the notice all unauthorized entities, who are indulging in such activities, are warned to desist and refrain from operating under NPS-Lite/Swavalamban in any manner, failing which actions as aforementioned shall be resorted to. vi. Revision in Fee for Banks/POP for KYC verification for online subscriber registration under e-nps As per the existing guidelines, subscribers can register online in NPS after two stages of verification online PAN verification by CRA and KYC authentication by the Banks in electronic form to CRA. The banks acting as POP were Rs. 100/- per subscriber for its KYC verification services. It has been decided by the Authority to increase the amount of compensation from the existing Rs. 100 per subscriber to Rs. 125/- per subscriber for the Banks acting as POP for their KYC verification services. Other terms and processes under e-nps remain unchanged. vii. Deletion of unmatched Subscriber Contribution Files (SCFs) in CRA system after 10 days of SCF upload Currently, the validity period of SCF system is stipulated for 15 days since as per instruction issued by CRA vide Circular No. CRA/PO&RI/PAO/2012/002 dt SCF gets deleted in case Matching & Booking process is not completed within 15 days from the date of upload of SCF. In order to further streamlining the process by reducing the number of unmatched SCFs in the CRA system due to delay in remitting NPS contributions by nodal offices and to inculcate discipline among these offices by ensuring remittance of NPS contributions to the Trustee Bank as soon as SCF is uploaded in CRA system, it has been decided to reduce the validity period of subscriber Contribution File (SCF) uploaded in CRA system from 15 days to 10 days w.e.f Therefore, SCFs uploaded after , if not matched & booked within 10 days, will be deleted from the CRA system. Keeping in view the above, nodal offices are required to remit the NPS contributions in such a way that the SCF uploaded in the CRA system gets matched and booked, in prescribed timelines. 14

16 Invitation for Article/Paper for Publication in Pension Bulletin Pension Fund Regulatory and Development Authority, brings out a monthly bulletin related to NPS, pension and other development in the pension market both within the country and abroad with a view to provide a forum for exchanging of ideas and expanding of the theoretical and practical aspects of the pension and old age income security, PFRDA invites articles/research papers from the practitioners, pension/retirement/superannuation/ provident fund managers/ academicians/ research organization and the general public. PFRDA may consider payment of honorarium to the selected articles. The original/unpublished papers/articles not more than 3000 words in Times New Roman, 12 size font, double space with one inch margin at top, bottom, left and right side with source of data may be sent in word and pdf form to alpana.vats@pfrda.org.in Section 5: Press Releases Online Subscriber Registration and contribution under NPS using enps platform 1. In light of Hon ble Prime Minister s Digital India campaign on promoting egovernance for providing last mile connectivity through extensive use of ICT (Information and Communications Technology) platforms, PFRDA has been pursuing the development and operationalization of online transaction facilities for the prospective as well as existing subscribers of NPS. 2. PFRDA introduced enps online portal whereby PAN (Permanent Account Number) and savings bank account of new subscribers to NPS who are already customers of the banks are accepted as KYC with active participation of the banks acting as POPs for opening of accounts under NPS. 3. PFRDA has received feedback from prospective subscribers and other stakeholders that those who voluntarily seek to use Aadhaar as their document of identity for availing of the enps online platform to join NPS should not be deprived of this enps facility. 4. As the identity and address for such account holders is established through ekyc facility with the express consent of the subscriber through One Time Password (OTP) and as Aadhaar is a unique number, its use as a KYC document rules out the possibility of opening duplicate retirement (PRAN) accounts. PFRDA has accordingly revisited the issue and believes that enabling eaadhaar in addition to PAN and bank account based KYC for the enps platform can reduce the cost and time of operation and ensure wider coverage to the citizens of India under the old age income security schemes and thus help in fulfilling the mandate given to it under the provisions of the PFRDA Act, PFRDA has accordingly modified the enps functionality to accept PAN and bank account or eaadhaar as the KYC document for online registration of subscribers under NPS. With the operationalization of this modified enps platform, the subscriber will now have the following options for opening of account: 15

17 a) Opening of account through any of the Points-of- Presence- Service Provider (POP- SP). b) Opening of account online using PAN and net banking of the selected bank. c) In this case KYC verification is done by the Bank. The PRAN gets activated only after KYC verification by bank. c) Opening of account online using Aadhaar No. and OTP received from UIDAI. In this case, the subscriber can instantly get their PRAN generated and can contribute. 6. The enps platform using Aadhaar based KYC verification is one of the options for any prospective subscriber to join NPS and it is optional and purely voluntary on the part of the prospective subscriber. 7. To register under NPS through enps using Aadhaar, the prospective subscriber needs to have Aadhaar Number/Card with access to the mobile number registered with Aadhaar. 8. With the use of this Aadhaar based KYC verification, the subscriber would be able to open his NPS account online. The Prospective subscriber will require to follow the undernoted process for opening of NPS account: The prospective subscriber will go to enps platform hosted on NPS Trust website and enter Aadhaar and validate the same using OTP (Sent on the mobile number registered with Aadhaar). Then he will be required to fill up the mandatory details like choice of Pension Fund, Investment Scheme, nominations etc. Address and Date of Birth details will be auto-populated from details available with Aadhaar. He will be required to provide a mobile number and ID (Mandatory requirement). He will be required to Scan and upload the signature. Subscriber may also upload a scanned photograph, in case he/she wishes to replace the photo obtained from Aadhaar, if the Aadhaar photo is blurred or hazy. He will be required to make online payment (Minimum amount of Rs 500/-). After completion of this process, the PRAN will be generated instantly. 9. Subscriber will be required to print the form, paste photograph, affix signature and submit the physical form to CRA within a specified period of time while continuing contributing online. 10. A prospective subscriber can visit NPS Trust website and select NPS Online menu to register and contribute to NPS. 11. The complete information about enps is available on PFRDA website and also on NPS Trust website 16

18 Through this facility, it is expected that the subscriber will have multiple advantages like seamless onboarding experience where he need not visit a Point of Presence and can register from anywhere through an internet connection, contribution with minimum cost of transaction and reduction in errors resulting from various manual activities. Section 6: Macro-economic Statistics Indicators Units As on 31 st December 2015 As on 30 th January 2016 Absolute Change Percentage Change =Col 4- Col 3 S&P BSE Sensex = {Col 5/ Col 3 }*100 CNX Nifty Rs/$ Gold Rs/10 gm 25,018 26, Crude Oil (NYMEX) $/Barrel Whole Price Index (y-o-y) ON BASE =100* Consumer Price Index ON BASE (y-o-y) 2012=100* Index of Industrial Production** (y-o-y) ON BASE = year G-Sec Yield p.a Foreign Exchange Reserve USD in bn % Net FPI/FII(Equity) (Rs crore) Rs Crore Net FPI/FII (Debt) Rs Crore Net FII (Total) Rs Crore * Figures of November and December, 2015 ** Figures of October and November, 2015 Source: BSE, NSE, RBI, CSO, SEBI 17