National Pension System (NPS) is a defined contribution pension scheme. NPS is voluntary for subscription by an individual to make contributions to his/her Individual Pension Account during the working life for creating a pension corpus from which regular income will be generated after retirement.

NPS is mandatory for Central Government recruits w.e.f. 1 January 2004 (except armed forces), replacing the earlier defined benefit pension scheme and has subsequently been adopted by most State Governments.

• Regulated: NPS is regulated by PFRDA, established through an Act of Parliament (PFRDA Act 2013).
• Pension for All: Can be voluntarily subscribed by any Indian Citizen (resident/non-resident/OCI).
• Low Cost: NPS is one of the lowest cost pension schemes in the world.
• Flexible: Choice of PoP, CRA, Pension Fund and Asset Allocation.
• Portable: Account can be transferred across employment and locations.
• Tax Efficient: Tax incentives available under the Income Tax Act, 1961.
• Optimum Returns: Market-linked returns based on subscriber choices.
• Transparent: 24x7 online account access and public disclosures.

• Any Indian Citizen (resident or non-resident) and Overseas Citizen of India (OCI).
• Aged between 18 and 85 years.
• Compliant with Know Your Customer (KYC) norms.

Hindu Undivided Families (HUFs) and Persons of Indian Origin (PIOs) are not eligible. NPS is an individual pension account and cannot be opened on behalf of a third person.

Yes. NPS can be voluntarily subscribed along with any other pension scheme. However, an individual cannot have multiple NPS accounts.

The pension amount depends on total contributions made, accrued returns, and the portion of corpus utilized for annuity purchase from an empanelled Annuity Service Provider (ASP).

There is no implicit or explicit assurance of benefit under NPS and investments are subject to market risks.

NPS caters to Central Government Sector, State Government Sector, Corporate Sector, and All Citizen Sector. Individuals voluntarily subscribing to NPS are categorized under the All Citizen Sector.

NPS has a unique unbundled architecture wherein each intermediary such as PoP, Pension Fund, CRA, Trustee Bank, ASP, Retirement Advisor, Custodian and NPS Trust performs a specialized role assigned by the regulator.

This structure safeguards subscribers' interests and keeps operational costs at a minimum.

https://www.federal.bank.in/documents/d/guest/nps-charges

An NPS account can be opened through:

• Points of Presence (PoP) registered with PFRDA in online or physical mode.
  • Acts as the first point of contact.
  • Provides registration, KYC, contribution, account update, withdrawal, and grievance services.
• Online platforms (myNPS and NPS Vatsalya).
• Federal Bank Website → Personal → Products → Open NPS Online.

There are two types of accounts under NPS:

• Tier-I: Default pension account with tax benefits.
• Tier-II: Optional investment account available with an active Tier-I account.

* Subscriber can select different Pension Funds and Investment Options for Tier-I and Tier-II.

For Residents:

• Photograph, PAN, Address Proof and Bank Account Proof.

For NRIs/OCIs:

• PAN, Passport/OCI Card, Address Proof and NRE/NRO Account Proof.

• Point of Presence (PoP)
• Central Recordkeeping Agency (CRA)
• Pension Fund
• Investment Choice
  • Active Choice (E/C/G/A)
  • Auto Choice (LC25, LC50, LC75)

• PoP – Anytime
• CRA – Twice a year
• Pension Fund – Once a year
• Investment Choice – Four times a year

You will receive an acknowledgement number, welcome kit and confirmation by registered email.

PRAN (Permanent Retirement Account Number) is a unique account number that remains unchanged throughout life.

Through PoP, CRA website/mobile application, or toll-free support.

Contributions can be made through PoP or online channels and are invested based on the chosen investment pattern.

• E: Equity
• C: Corporate Bonds
• G: Government Securities
• A: Alternate Assets

Your account may become frozen and can be reactivated through the nearest Federal Bank branch.

Submit Form S2 / ISS through the PoP with supporting documents.

Investment details can be viewed through CRA login and account statements.

• Fund Performance: https://npstrust.org.in/weekly-snapshot-nps-schemes
• NPS Calculator: https://npstrust.org.in/nps-calculator
• NPS Vatsalya Calculator: https://npstrust.org.in/nps-vatsalya-calculator

You can withdraw from your NPS account in the following ways:

Partial Withdrawal (for specific reasons)

1. Before 60 years of age / Superannuation (whichever is later):
2. Frequency: Maximum 4 times
3. Minimum Interval: 4 years between two withdrawals
4. Post 60 years of age / Superannuation (whichever is later):
5. Frequency: Not Applicable
6. Minimum Interval: 3 years between two withdrawals

Partial withdrawals are subject to eligibility criteria, limits, frequency, and documentary requirements prescribed by PFRDA from time to time.

Premature Withdrawal

• Permitted any time before attaining 60 years of age.
• If corpus is less than ₹5 lakh, the entire amount can be withdrawn as lump sum.
• If corpus exceeds ₹5 lakh, up to 20% can be withdrawn as lump sum and at least 80% must be utilized for annuity purchase.

Normal Withdrawal

• Permitted on or after attaining 60 years of age.
• Up to 80% of corpus can be withdrawn as lump sum and at least 20% must be utilized for annuity purchase.
• If corpus is less than ₹8 lakh, the entire amount can be withdrawn as lump sum.

Additional Options

• Continue in NPS up to 85 years of age.
• Defer lump sum withdrawal or annuity purchase up to 85 years of age.

On Death

• Nominee or legal heir may withdraw the entire corpus or opt for annuity purchase, as permitted under regulations.

Your NPS account continues automatically up to 85 years of age. You may choose to exit at any time before attaining 85 years. Exit becomes mandatory at 85 years of age.

• Higher education of children.
• Marriage of children.
• Purchase or construction of a residential house.
• Treatment of specified illnesses.
• Disability greater than 75%.
• Skill development or self-development activities.
• Establishment of own venture or start-up.

• Online through NPS login credentials.
• Offline through the Point of Presence (PoP) by submitting the prescribed forms and supporting documents.

Annuity Services are financial products that provide pension payouts at guaranteed intervals (monthly, quarterly, half-yearly or annually) for a specified period based on the annuity purchased.

The following Annuity Service Providers (ASPs) are empanelled with PFRDA:

• Life Insurance Corporation of India (LIC)
• SBI Life Insurance Co. Ltd.
• ICICI Prudential Life Insurance Co. Ltd.
• HDFC Life Insurance Co. Ltd.
• Bajaj Allianz Life Insurance Co. Ltd.
• Star Union Dai-ichi Life Insurance Co. Ltd.
• Edelweiss Tokio Life Insurance Co. Ltd.
• IndiaFirst Life Insurance Co. Ltd.
• Canara HSBC Life Insurance Co. Ltd.
• Kotak Mahindra Life Insurance Co. Ltd.
• Max Life Insurance Co. Ltd.
• Tata AIA Life Insurance Co. Ltd.
• PNB MetLife India Insurance Co. Ltd.
• Shriram Life Insurance Co. Ltd.
• Aditya Birla Sun Life Insurance Co. Ltd.

Common NPS Annuity Options

1. Life Annuity
   • Pension is paid throughout the lifetime of the subscriber.
   • Payments cease upon the subscriber's death.
   • No amount is returned to nominees.
2. Life Annuity with Return of Purchase Price (RoP)
   • Regular pension is paid throughout the subscriber's lifetime.
   • Upon death, the original purchase price is returned to the nominee or legal heir.
3. Joint Life Annuity (100% to Spouse)
   • Pension is paid to the subscriber during his/her lifetime.
   • After the subscriber's death, the spouse receives 100% of the pension for life.
4. Joint Life Annuity with Return of Purchase Price
   • Pension continues to the spouse after the subscriber's death.
   • After the demise of both subscriber and spouse, the purchase price is returned to the nominee.
5. Family Income Annuity Option
   • Pension is paid sequentially to eligible family members such as subscriber, spouse and parents (as applicable).
   • After the last beneficiary's death, the purchase price is returned to the nominee or legal heir.

Pension will be paid directly by the selected Annuity Service Provider (ASP) according to the annuity plan purchased by the subscriber.

• No withdrawal restrictions. Funds can be withdrawn at any time.
• Tier-II balance can be transferred to Tier-I account (one-way transfer only).
• Upon closure of Tier-I account, the Tier-II balance is also transferred to the subscriber's bank account.

• Submit a complaint online through the Central Grievance Management System (CGMS) using your NPS login.
• Intermediaries are required to resolve grievances within 30 days.
• If dissatisfied with the resolution, the grievance may be escalated through the prescribed mechanism.

• Common Scheme: Refers to the standard NPS framework where subscribers choose the investment allocation through Active Choice or Auto Choice. It is designed to be simple and suitable for most investors.
• Pension Scheme: Refers to the individual investment schemes managed by Pension Fund Managers in which NPS contributions are invested for retirement corpus creation under the Multiple Scheme Framework.

Tier-I Account

Section 80CCD(1) – Own Contribution

• Deduction available for contributions made to NPS Tier-I account.
• For salaried employees: up to 10% of Basic Salary + Dearness Allowance (DA).
• For self-employed individuals: up to 20% of Gross Total Income.
• Included within the overall limit of ₹1.5 lakh under Sections 80C, 80CCC and 80CCD(1).
• Available under the Old Tax Regime.

Section 80CCD(1B) – Additional ₹50,000 Deduction

• Additional deduction of up to ₹50,000 over and above the ₹1.5 lakh limit.
• One of the key tax benefits available under NPS.
• Applicable only for Tier-I contributions.
• Generally available under the Old Tax Regime.

Section 80CCD(2) – Employer Contribution

• Employer contribution to NPS is eligible for deduction.
• Available under both Old and New Tax Regimes.
• Deduction can be claimed up to 14% of Basic Salary + Dearness Allowance (DA), subject to applicable provisions.

Tier-II Account

• No tax benefits are available on contributions.
• Returns and gains are taxable as per the applicable income tax provisions and the individual's tax slab.