NPS – Detailed procedure, Benefits and and guidelines issued by Govt from time to time

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Write-up on National Pension System (NPS) – Detailed procedure, Benefits and and guidelines issued by Govt from time to time

National Pension System (NPS)

National Pension System (NPS) (previously called New Pension Scheme) was introduced with effect from 01.01.2004 replacing the earlier system of defined pension under CCS (Pension) Rules, 1972. Those central government employees appointed on after this date will be covered under the new scheme. Under the earlier system, assured pension and other benefits, based on the last pay drawn was available to be employees. In the NPS, 10% of the basic pay plus DA will be recovered from the salary of employees towards employees’ contribution. Equal amount will be contributed by Government as employer’s contribution. Both the contributions will be invested each month by the funds managers appointed by Pension Fund Regulatory Authority (PFRDA) against the distinctive PRAN (Permanent Retirement Account) in the name of the subscriber. Presently, the fund is managed by M/s National Security Depository Ltd. (NSDL), Mumbai. The funds are being invested with M/s LIC, SBI Life Insurance and UTI Mutual Fund. The PFRDA or the fund managers do not offer any fixed income on investment or any assured minimum pensionary benefits on exit from NPS.

Immediately on joining service, the subscribers are required to apply for allotment of PRAN. Recovery towards NPS will begin with the next month followed by the date of appointment. If PRAN is not allotted by then, their contributions will not be uploaded to the fund managers and kept as “un-posted” with the PAO concerned. Any income on the contributions will be available only on investment with the fund managers. Therefore, it is important to submit the application for allotment of PRAN along with the requisite documents to be submitted at the time of joining service.


Common application form (CSRF 1) is to be used for both departmental NPS subscribers and GDS (SDBS) subscribers. Those who are promoted to departmental service from GDS are required to submit afresh for allotment of PRAN under NPS, since the PRAN allotted to them under SDBS is distinctive and different from the NPS for departmental staff. However, those who were earlier in service in other departments/organizations where NPS was applicable and PRAN earlier allotted need not apply for PRAN again. The PRAN allotted to them earlier can be shifted to the new department where they are working now, together with the balance amount resting with the PRAN. For this purpose, they may apply to the PAO through the DDO concerned immediately on joining the new establishment.

The DDOs concerned (HPOs/HROs etc for NPS and Divl. Heads (NLCC) for SDBS) should forward the applications to the PAO (Postal Accounts Office) together with covering letter in Annexure S-5 form. The PAO will process and forward the applications to the agency concerned for onward transmission to M/s NSDL.

The following points may be kept in mind while processing the CSRF.1 applications:

Applications incomplete in any respect and/or not accompanied by the required documents are liable to be rejected. The application is also liable to be rejected if the mandatory fields are left blank or the application form is printed back to back.

a) Black ink only should be used for filling up and authorizing the application.
b) Recent colour photograph of 3.5 X 2.5 cm size (Passport size) is to be affixed at the column provided. Signature or any other marks should not be made on the photograph.
c) Appropriate column should be ticked to earmark the sector to which the subscriber belongs.
d) Full name of the subscriber is to be given as first name. Initials may be given as middle name / last name, as the case may be.
e) Date of birth should be matching with the entry in the service book. Proof of date of birth is to be provided.
f) Address provided in the application form should match with the address provided in the address proof.
g) Providing Mobile no./e-mail ID is desirable, since monthly credit updation details and periodical informative alerts are provided vide SMS/e-mail etc.
h) Subscriber’s bank details to be provided against item no.7. Bank account with IFSC/MICR details is desirable, since all the future transactions are to be made only electronically.
i) If there is only one nominee, item no.8 may be filled up. If there are more than one nominee, Annexure III to CSRF 1 may be used. If the nominee is minor, his/her date of birth and details of guardian (other than the subscriber himself) to be provided. Percentage share applicable to each nominee in round figure (fraction not allowed) to be mentioned against each nominee. Total percentage of all the nominees altogether should be 100.
j) Filling up of item no.10 is not mandatory. If the same is not filled up, default scheme for allocation of funds will be adopted by M/s NSDL.
k) Signature or thump impression of the subscriber should be affixed well within the column provided at the bottom of page 2. This will be digitalized and referred while processing all future applications submitted by the subscriber.
l) The DDO/NLCC concerned should fill up the service particulars at page 3 of the form (in black ink only) and affix his signature, name and rubber stamp at the appropriate columns provided at the left side of the top column (For Govt. sector). In the case of NPS Lite/Swavalamban subscribers, NLCC need not provide the certification on this page. This will be done by the PAO (NLAO). However, If Annexure III to CSRF 1 is submitted (For multiple nomination), the DDO/NLCC should provide the necessary certification at page 2 of Annexure III.
m) Annexure 1 to CSRF 1 is to be provided only if the subscriber wishes to opt for Tier II. (If he wishes to open a Tier II account, contributing additional subscription other than the mandatory subscription).
n) Annexure II to CSRF 1 is to be filled up only if the subscriber wishes to provide the additional details mentioned therein.

Following are the KYC documents to be submitted:

A) Date of Birth proof: Birth Certificate, School certificate, Aadhar, Election ID, Driving License, Passport, PAN card etc. wherein the DOB is provided.
B) ID Proof: Aadhar, Election ID, Driving license, PAN card, Bank pass book, Ration card etc. with photograph of the subscriber. (Copy of ration card will not be accepted if it is in vernacular only).
C) Address Proof: Any of the documents mentioned at B above which provides the address of the subscriber matching with the address provided in the application.
D) Bank account Proof: A cancelled cheque or attested copy of the pass book or banker’s certificate in original containing name of the subscriber, bank account number, bank’s name, branch name, address, PIN code, IFSC and MICR codes.

Copies of KYC documents submitted by the subscribers (to prove date of birth, ID, address and bank account particulars) should be self-attested by the subscriber and counter attested by the DDO/NLCC with the remarks “verified with the original”


After allotment of PRAN, there may be certain mistakes in the subscriber details such as name, father’s name, date of birth, bank account details, nomination, photo, signature etc. Immediately on receipt of PRAN, the subscribers has to verify and confirm the correctness of date printed on the card. They may also login to the web-site www. using their user ID (PRAN No.) and I-Pin received with the PRAN kit to verify the subscriber details. In case any correction or future modification is required, an application in Annexure S-2 is to be submitted through the DDO/NLCC concerned. While filling up this form the columns wherein corrections/modifications are required only need to be filled up. PRAN number should invariably be provided in the specified column on first page. If date of birth is to be modified, proof of date of birth, duly certified by the DDO/NLCC that the revised DOB is in accordance with the entries in the service book, is to be provided. For change in name, address, bank account details, etc., proof for then same is required to be provided. The DDO/NLCC has to certify the application on the left side of top-most portion on the first page. If re-issue/re-print of PRAN is required, this has to be specifically mentioned in the specified column on the last page of the application.

If correction/modification in signature or photograph of the subscriber is required, a separate form (Annexure S-7) is to be submitted. This has to be forwarded by the DDO/NLCC to the PAO together with a covering letter in Annexure S-8.


When a subscriber is transferred from one department to another, central government to state government and vice versa, government sector to public sector and vice versa, from one circle to another circle within the department etc., his/her PRAN can be shifted to the new unit together with the accumulated balance amount, if the employment under the new unit is covered under NPS. For this purpose, the subscriber has to submit a written application to his new DDO. The maker of the new DDO can capture the subscriber shifting request on-line and upon authorization by the checker, the PRAN will be shifted to the new unit on the very next day. It is not necessary to apply for new PRAN in such cases. However, GDS employees who are covered under SDBS have to apply afresh for allotment of PRAN under NPS, since the SDBS scheme is distinctively different from the NPS for departmental employees. They may submit an application in Form SDBS-1 for transfer of their accumulated wealth in SDBS to the newly allotted NPS PRAN.


Subscribers may exit from NPS due to the following reasons:

01. Superannuation.
02. Pre-mature exit (due to resignation, voluntary/compulsory retirement etc.)
03. Death while in service.
04. Subscribers who were later brought under the purview of CCS (Pen) Rules.
05. Partial withdrawal.

On superannuation, withdrawal application is to be submitted in Form 101-GS. For pre-mature exit (resignation, voluntary/compulsory retirement etc.), Form 102-GP is to be used. Death claims (Death while in service) are to be submitted in Form 103-GD.

In case of superannuation, subscriptions towards NPS should be stopped 3 months prior to the date of superannuation.

The following documents are to be submitted with the application.

01. Original PRAN card. (If the same is lost or not traceable, a declaration by the subscriber mentioning the circumstances of loss and with an assurance to submit the same if and when traced out subsequently, duly countersigned by the DDO to be submitted).

02. ID/Address proof: Photocopy of any of the following documents with name, photograph and address matching with the address provided in the application, duly attested by the DDO – Aadhar, Election ID, Driving licence, Passport, ID card issued by State/Central Govt., Bank pass book etc.

03. Bank account proof: Cancelled cheque with name of the subscriber printed on it or copy of the bank pass book or certificate in original issued by the bank manager. The following information should be available in the bank account proof – Name of the Subscriber, Name of Bank, Branch, Branch address, PIN Code, Account number and IFSC Code.

04. In case of pre-mature exit, copy of the orders of competent authority allowing such exit.

05. In death claim cases, (if withdrawal from NPS is opted), separate application to be submitted by each nominee. Original or attested copy of death certificate is to be submitted. If nomination does not exist, Legal Heirship Certificate/ Succession Certificate / Letter of Administration as the case may be to be produced, depending upon the amount involved.

In cases of death of subscriber while in service, the nominees/family members have option to avail family pension and death gratuity from Govt., surrendering 100% of the NPS wealth to the Govt. For this purpose, they have to submit the applications for family pension, gratuity etc. in the prescribed forms (under CCS (Pen) Rules) to the Divisional Head concerned. Request-cum-undertaking for surrendering the NPS wealth in Annexure A and Annexure II has to be submitted by the nominees/family members (As per the nominations registered with M/s NSDL) and Annexure I by the DDO also to be submitted with such application.

Application is to be filled up in black ink in capital letters. Application form is not to be printed back to back. Passport size colour photograph of the applicant is to be affixed at the specified column on the first page of application and self-attested by him/her. Name of the subscriber is to be entered in the application exactly as provided in the PRAN card. Signature of the subscriber affixed in the application should match with the signature in the PRAN card. It is desirable to provide Mobile number, e-mail ID etc. for updating the status of application at various stages.

Percentage of lump-sum amount of withdrawal and percentage of amount to be invested for purchase of annuity are to be mentioned under Section B on page-2

As per the existing rules relating to withdrawal of NPS wealth on superannuation/resignation/death of subscribers, the lump-sum amount which can be withdrawn is as follows:

a) Superannuation: Up to 60% of the total NPS wealth. If the total NPS wealth as on the date of retirement is less than or equal to Rs.2 lakhs, the subscriber has an option to withdraw 100% of the NPS wealth.
b) Resignation: Up to 20% of the total NPS wealth. If the total NPS wealth as on the date of resignation is less than or equal to Rs.1 lakh, the subscriber has an option to withdraw 100% of the NPS wealth.
c) Death: Up to 20% of the total NPS wealth. The nominees/family members have an option to withdraw 100% of the NPS wealth, if the same is less than or equal to Rs.2 lakh as on the date of death.

If 100% withdrawal is opted, a request-cum-undertaking for this purpose in the prescribed form (separate forms for Superannuation/Premature exit/death cases) is to be submitted. Annuity or any other benefit under NPS will not be admissible in such cases.

After withdrawal of the NPS wealth up to 20% or 60% as above, the remaining NPS wealth not less than 80% or 40% as the case may be has to be invested with the Annuity Service Providers (ASPs) empanelled by PFRDA/NSDL for the purpose of providing annuity to the subscribers/nominees/family members. After transfer of the withdrawal amount (up to 20% or 60% as the case may be) the subscribers have to approach the ASPs or M/s NSDL Mumbai directly for submitting the required application form for investment of the amount with the ASP concerned. However, at the time of submitting the application form for withdrawal of NPS wealth (Form.101-GS/102-GP/103GD) on retirement/resignation/death, the subscribers/nominees/family members have to choose the name of ASP and the name of scheme offered by the ASPs in the relevant column of the application form itself.

At present, the empanelled ASPs are the following:

1. SBI Life Insurance Co. Ltd. (ASP Code-ASP001)
2. Life Insurance Corporation of India. (ASP Code-ASP004)
3. ICICI Life Insurance Co. Ltd. (ASP Code- ASP003)
4. HDFC Life Insurance Co. Ltd. (ASP Code-ASP002)

These ASPs offer 4 different types of annuity schemes to the annuitants to choose from:

a. Annuity payable for life to the annuitant.
(Scheme Code: SBI-AS001001/LIC-AS004001/ICICI-AS003001/HDFC-AS002001)
b. Annuity payable for life with return of purchase price on death of annuitant.
(Scheme Code: SBI-AS001002/LIC-AS004002/ICICI-AS003002/HDFC-AS002002)
c. Annuity payable for life with a provision of 100% of the annuity payable to the nominee during his/her life time on the death of the annuitant.
(Scheme Code: SBI-AS001003/LIC-AS004003/ICICI-AS003003/HDFC-AS002003)
d. Annuity payable for life with a provision of 100% of the annuity payable to the nominee during his/her life time on the death of annuitant. The purchase price will be returned on the death of last survivor nominee.
(Scheme Code: SBI-AS001004/LIC-AS004004/ICICI-AS003004/HDFC-AS002004)

The rates of monthly annuity payable for each Rs.10,000/- invested with different ASPs are available in the Table of Annuity Schemes.

* As per the guidelines issued by M/s NSDL regarding purchase of annuity, M/s SBI Life Insurance Co. Ltd does not accept applications for purchase of annuity if the amount for purchase of annuity is less than Rs. 2 Lakh and M/s LIC of India does not accept the same if the amount for purchase of annuity is less than Rs. 1 Lakh. (after lump-sum withdrawal of maximum 60% / 20% of the total NPS wealth).

Bank account details matching with the proof submitted, to be provided under Section C. Particulars of nominees to be furnished on page-4, which should be signed by the subscriber/applicant as well as by 2 witnesses. If there are more than one nominee (maximum 3), Form 401-AN to be submitted, instead of providing the nomination on page-4. If Form 401-AN is submitted, the same also is to be certified by the DDO in the specified columns.

If the nominee is the spouse of subscriber (wife/husband) his/her date of birth also is to be provided.

Aadhar number and/or income tax PAN number of the claimant/s are also required to be provided.

The DDO has to furnish a certificate on page-5 providing name of subscriber, date of retirement as per Govt. records, DDO code, designation and office name of the DDO etc. Signature and office seal of the DDO to be affixed at the appropriate columns specified for the purpose.

The subscriber has to submit an advanced stamped receipt on page-5. The amount need not be mentioned in the receipt, since the value of NPS wealth may vary as on the date of withdrawal.

The page numbers mentioned above are applicable to Form 101-GS. For the other forms the page numbers may vary.


Certain subscribers covered under NPS were subsequently brought under CCS (Pen) Rules on account of implementation of court orders, counting of training period and temporary status casual labour service etc. In such cases, the NPS contributions made by those subscribers (Employees’ contributions) and accumulated returns thereon has to be refunded to them. For this purpose, the subscriber has to submit an application in Form NPS-EWC through the DDO concerned. Original PRAN card and copy of the orders of competent authority bringing the subscriber under the purview of CCS (Pen) Rules are to be submitted along with the application. In cases of those who are still in service, such amount will be credited to their GPF account. Those who are not in service (on account of superannuation, resignation, death etc.), sanction for payment of the amount through the DDO concerned will be issued by DA(P).


Partial withdrawal from NPS has been introduced vide Regulation 8 of the PFRDA (Exit and withdrawal from NPS) Regulations 2015, subject to the following terms and conditions:

(A) Purpose: A subscriber on the date of submission of the withdrawal form, shall be permitted to withdraw not exceeding 25% of the contributions made by him to his individual pension account, for any of the following purposes only:-

a) For higher education of his or her children including legally adopted child.
b) For marriage of his or her children, including legally adopted child.
c) For the purchase or construction of a residential house or flat in his or her own name or in a joint name with his or her legally wedded spouse. In case the subscriber already owns either individually or in the joint name a residential house or flat, other than ancestral property, no withdrawal under these regulations shall be permitted.
d) For treatment of specified illnesses: If the subscriber, his legally wedded spouse, children including a legally adopted child or dependent parents suffer from any of specified illnesses, which shall comprise of hospitalization and treatment in respect of the following diseases:

i. Cancer ii. Kidney failure (End Stage Renal Failure) iii. Primary Pulmonary Arterial Hypertension iv. Multiple sclerosis v. Major Organ Transplant vi. Coronary Artery Bypass Graft vii. Aorta Graft Surgery viii. Heart Valve Surgery ix. Stroke x. Myocardial Infraction xi. Coma xii. Paralysis xiii. Paralysis xiv. Accident of serious/life threatening nature xv. Any other critical illness of a life threatening nature as stipulated in the circulars, guidelines or notifications issued by the Authority from time to time.

(B) Limits: The permitted withdrawal shall be allowed only if the following eligibility criteria and limit for availing the benefit are complied with by the subscriber:

(a) The subscriber shall have been in the NPS at least for a period of last ten years from the date of his or her joining. In case the subscriber is mandatorily covered under NPS the period of 10 years for partial withdrawal will be considered from the date of applicability of NPS for such subscribers. However, in case of inter-sector/intra-sector shifting of subscriber previous tenure in NPS will also be considered.

(b) Frequency: The subscriber shall be allowed to withdraw only a maximum of 3 times during the entire tenure of subscription under the NPS and not less than a period of 5 years shall have elapsed from the last date of each of such withdrawal. The mandatory requirement of 5 years shall not apply in case of treatment for specified illness or in case of withdrawal arising out of exit from NPS or death of subscriber. For subsequent withdrawal only the incremental contributions made by the subscriber after the first/next subsequent withdrawal as the case may be will be considered.

M/s NSDL, Mumbai has incorporated necessary modules in their web-site for on-line processing the partial withdrawal applications. The subscribers are required to apply in Form 601-PW together with necessary documentary proof to establish the purpose of withdrawal and bank account proof, ID/address proof etc., duly attested by the DDO. The DDO concerned may forward the application to the PAO with due certification in the specified columns. The PAOs will upload the withdrawal request on-line and on approval, the withdrawal amount will be transferred to the designated bank account of the subscriber electronically by M/s NSDL.

(Complied by: M. P. Vijayan, Circle Secretary, Postal Accounts Employees Association, Kerala)