NPS Tier II through Default scheme for Government Sector Subscribers: PFRDA

NPS Tier II through Default scheme for Government Sector Subscribers – Additional investment option: PFRDA Circular dated 22.09.2023

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

CIRCULAR

Circular No: PFRDA/2023/27/Sup-CRA/08

22nd Sep 2023

To
All NPS Stake Holders and Govt sector subscribers

Subject: NPS Tier II through Default scheme for Government Sector Subscribers-reg

As part of PFRDA’s ongoing commitment to provide enhanced investment avenues under NPS, it has been decided to introduce the NPS Tier Il Default Scheme exclusively for Government Sector Subscribers.

2. Government Sector Subscribers under NPS will be given additional investment option of Default Scheme along with the existing Scheme E / Scheme C / Scheme G investment options.

3. The NPS Tier II Default Scheme represents a significant step forward in catering to the diverse financial aspirations of the Government Sector Subscribers. This scheme is designed to offer flexibility and convenience, aligning with the unique requirements of the Subscribers under the Government sector.

4. Government Sector Subscribers may continue with the Default Scheme under Tier Il even after their shifting account to another sector also.

5. The key benefits of an NPS Tier II account:

a. Greater Flexibility: There is no mandatory annual contribution requirement for Tier II. The Subscriber can open the account by paying the minimum contribution. There is no maximum limit on the amount that can be contributed under Tier II.

b. Easy Withdrawals: With a Tier II account, subscribers can withdraw money at any point of time. It’s a convenient way to access the savings when subscribers may need them the most.

c. Seamless Transfer: If subscriber wishes to move the funds to primary pension account (Tier I), it can be done at any point. This feature ensures that the investments remain dynamic and adaptable to your changing needs.

d. No Minimum Balance: There is no requirement for maintaining a minimum balance in NPS Tier Il account. It offers the freedom to contribute as much or as little as one wants.

e. Separate Nomination Facility: The Subscribers can nominate beneficiaries for Tier II account separately, if required.

f. Default Investment Scheme: The facility of the Default Investment Scheme of Tier I has been extended to Tier Il accounts for Government Sector Subscribers. This facilitates the Subscribers to have access to a simplified default investment scheme, similar to Tier I, without the need for actively choosing a scheme of investment or PFs.

g. Easy to onboard: To join Tier II and opt for the Default Scheme, the Subscribers need to provide consent or a request to the CRA through the associated nodal office. The online & electronic modes of consent mode available on the CRA portal for the benefit of Subscribers.

6. Government Sector Subscribers associated with Protean CRA can complete the account activation process on Protean e-NPS website. If any subscriber is already having Tier Il and wish to opt for default scheme in Tier II, one can do the same through scheme Preference Change option available in the login of subscriber. More than 700 subscribers have already opted for default scheme in Tier II.

The facility of Tier Il under default choice will also be made available soon for subscribers associated with KFin CRA.

7. This circular is issued under Section 14 (1) of PFRDA Act,2013 read with Regulation 18 and 19 of the PFRDA (Central Recordkeeping Agency) Regulations,

Yours Sincerely,
Digitally signed by
K MOHAN GANDHI
Chief General Manager

Source: PFRDA