Dual benefit of Low Cost & Power of Compounding: The pension wealth accumulates over a period of time till retirement; grows with a compounding effect and the account maintenance charges being low, larger would be the eventual benefit of the accumulated pension wealth
Tax Benefits: Benefits available under Section 80 CCD(1) and 80 CCD(2) as per relevant sections of Income Tax Act 1961.
Safety: Regulated by the Pension Fund Regulatory & Development Authority (PFRDA) and introduced by the Government of India
Transparency: Through online access to your pension account.
Portability: Across all geographical locations and employments across India
Under NPS, two types of accounts are available to you i.e., Tier I & Tier II
Tier I account – where you and the Government contribute funds into your individual account. As a subscriber you contribute 10% of your Basic Pay and DA into your Tier-I account on a mandatory basis every month, which is invested along with the matching contribution from the employer. The regular NPS contributions and the accumulated amounts are reflected in your PRAN while you are in service and shall be used at retirement for procurement of your pension.
Tier II account – a voluntary savings account from which you are free to withdraw the savings at your own choice. An active Tier I account along with PRAN is a pre requisite for opening of a Tier II. You can approach any Point of Presence- Service Provider (POP-SP- list available at CRA website www.npscra.nsdl.co.in) for activation of Tier II account along with a copy of PRAN card and PAN card. Furthermore, since Tier II is a voluntary savings account, the government does not contribute any amount into your Tier II account and no tax benefits are available for the contributions made.
Investments of NPS Contributions: Your contributions are allocated to three Public Sector Pension Fund Managers, viz. SBI Pension Funds Private Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited and each of the PFs invests the funds in the proportion of upto 55% in Government securities, upto 40% in Debt securities, upto 15% in Equity and upto 5% in Money Market instruments.
Statement of Transaction (SOT): This contains the details of transactions carried out in your pension account. It contains details of contribution amount invested and units allocated during the financial year, unit holdings as on date across all PFs and any changes in your PRAN details. You can access your SOT through CRA website using your I-PIN. Also, the CRA sends a copy of the SOT annually to your mailing address registered with CRA.
Grievance Redressal: You can raise the grievance/complaint through CRA Call centre using your T-PIN or through the CRA website using your I-PIN under CGMS (Central Grievance Management System). A duly filled Form G1 (available at CRA website) may also be sent to CRA for lodging a grievance. You can also contact your Nodal office for resolving your grievance; the Nodal office may lodge the grievance on your behalf in CGMS. In case you are dissatisfied with the resolution of your grievance, you may write to Grievance Redressal Cell (GRC), PFRDA at the below mentioned address for taking appropriate action.