NEW PENSION SYSTEM (NPS)

New Pension System for every Citizen was introduced from 1 st May 2009 by the Pension Fund Regulatory and Development
Authority to provide old age pension security to citizens in the age group of 18-60. A brief detail of the Scheme (Tier I & Tier
II) is as below:

NPS is a voluntary Pension System of Pension Fund Regulatory and Development Authority (PFRDA) open to all
citizens in the age group of 18-60 years.
The Scheme is operative from 01.05.2009.
The objective is to provide old age pension; reasonable market based returns over long term
Bank designated branches i.e. Point of Presence-Service Provider (POP-SP) accept the application form and get the
subscribers registered with Central Record keeping Agency (CRA) for generation of the Permanent Retirement Account
Number (PRAN).
The PRAN will be quoted in all future transactions.
There are two models i.e. Tier I and Tier II.
Tier-I account is where you contribute your savings for retirement into a non-withdrawable account till you reach 60
years and draw pension for the rest of your life
In case of Tier I

1. Minimum contribution at the time of account opening -Rs.500/-

2. Minimum amount per contribution - Rs. 500/-
3. Minimum Account Balance at the end of FY - Rs. 6000/-
4. Minimum number of contributions in a year – 4

The subscriber can exit the scheme after attaining 60 years of age. He/She has to compulsorily annuitize 40% of the
accumulated pension wealth. Option to annuitize 100 % of the corpus is also available.
A Tier-II account is a voluntary savings account form which you are free to withdraw your savings whenever you
wish.
The facility of Tier II account is being offered from December 1, 2009 to all citizens of India including Government
employees mandatorily covered by NPS.
In case of Tier II activation of Government employees, mandatorily covered by NPS, There are two type of employees:
I)IRA Complaint - Those Government employees who are having PRAN Card.
II) Non-IRA Complaint - Those Government employees who are having only PRAN number, not having PRAN Card. For
Tier II activation of these employees KYC verification is required.
 The Tier-II would enable the existing Permanent Retirement Account (PRA) holders to build savings through
investments over and above those in the Tier I pension account. An active Tier I account will be a pre-requisite for
opening of a Tier II account.
No additional CRA charges would be levied for account opening and annual maintenance in respect of Tier II. However,
CRA will charge separately for each transaction in Tier II, the charges being identical to the transaction charge
structure in Tier I
There are no limits on number of withdrawals in Tier II.
There is facility for separate nomination and scheme preference in Tier I and Tier II.
There is facility of one-way transfer of savings from Tier II to Tier I.
Bank details will be mandatory for opening a Tier II account.
No separate KYC for Tier II account opening will be required; the only requirement is a preexisting Tier I IRA
Compliant account.
In case of Tier II,

1.Minimum contribution at the time of account opening -Rs.1000/-

2.Minimum amount per contribution - Rs. 250/-
3.Minimum Account Balance at the end of FY-Rs. 2000/-
4.Minimum number of contributions in a year - 4 One contribution in case a subscriber joins in thelast quarter)

In case of Composite Application for Tier I and Tier II both, Minimum contribution at the time of account opening is Rs.
1500/-.

2. Click Here to download Subscriber Registration Form

3. The Subscriber will be informed of the Permanent Retirement Account Number (PRAN) by the CRA. Once the CRA
provides the PRAN, the subscriber can start depositing his subscriptions through his chosen POP-SP.
4. The CRA keeps a record of all subscriptions.
5. A subscriber has three options for his investments:
Ø HIGH RISK HIGH RETURN: Investments in predominantly Equity Market Instruments
Ø MEDIUM RISK MEDIUM RETURN: Investment in predominantly Fixed Income Instruments
Ø LOW RISK LOW RETURNS: Investments in purely Fixed Income Instruments
In case no option is given Auto Choice will be done automatically.

6.SBI PENSION FUND PRIVATE LIMITED is one of the Pension Fund Managers handling subscription amounts.

7. Following costs are to be borne by the Subscriber at the time of registration and/or performing any transaction. The
contribution will be remitted net of bank charges.
 Rs. 20+ service tax as applicable by Government rules at thetime of opening of Tier I & doing the KYC and Rs. 20+
service tax as applicable by Government rules for first contribution.
Rs. 20+ service tax as applicable by Government rules at the time of opening of Tier II & doing the KYC and Rs. 20+
service tax as applicable by Government rules for first contribution.
Rs. 40+ service tax as applicable by Government rules at the time of opening of Composite (Tier I & Tier II Both)
account & doing the KYC, Rs. 20+ service tax as applicable by Government rules for first contribution of Tier I and
Rs. 20+ service tax as applicable by Government rules for first contribution of Tier II.
Rs. 20+ service tax as applicable by Government rules for any other transaction like making contribution/statement of
account or any other request.

For scheme details and location of your nearest designated branch please contact our contact centre on 1800112211.

© Copyright State Bank of India. Site credits Interpublicity