If you are looking to build a higher corpus at retirement and gain more flexibility with your investments, migrating your Superannuation funds to NPS is the most viable option. PFRDA, the regulatory body also realized the need to enable such an option where subscribers could transfer their Superannuation funds to NPS and enjoy superior benefits for their investments.
PFRDA, in 2017, launched the guidelines in respect of transfer of Superannuation funds to individual NPS accounts. HDFC Pension enables this smooth transition of funds to NPS so that our subscribers can enjoy a secured retirement.
Whether you are a Retail NPS subscriber, Corporate NPS subscriber or a Government NPS subscriber, you can migrate your SA funds to NPS.
Why migrate funds from SA to NPS?
Migrating your Superannuation funds to NPS offers a number of benefits in terms of tax saving opportunities, more flexibility on exit and higher returns on investment. Below are some important benefits to know for you to take a wise call for your retiral investments:
| Particulars | Superannuation | NPS |
|---|---|---|
| Tax Benefits on investment | Applicable on investment of up to 15% of Salary (Basic + DA) or Rs. 1.5 lakh whichever is lower | Applicable on investment of up to 10% of Salary (Basic + DA) with an upper limit of 7.5 lakh |
| Returns on investment | Returns are only around 8% | NPS offers higher returns on investment i.e. 11-12%* *subject to investment approach selected and market fluctuations |
| Tax treatment of exit at retirement age | You can withdraw only 1/3rd of corpus tax free. Balance is invested in annuity | You can withdraw up to 60% of corpus tax free at retirement. Balance is invested in annuity |
| Tax treatment on exit before attaining retirement age | No tax free withdrawals are allowed before attaining retirement age | You can withdraw up to 20% of your corpus and invest balance into annuity to start pension |
| Exit rule before attainment of retirement age | Exit allowed as per Trust Deed policy | Exit from NPS is allowed after 5 years of account opening |
| GST levied on annuity investment | 1.8% of annuity investment is charged as GST | No GST applicable on annuity investment |
| Continuation of Scheme upon leaving the Company | If your next employer does not offer Superannuation, you need to exit from the scheme and invest in annuity mandatorily | You have the option to continue investment in the same NPS account even when you switch jobs |
| Continuation of Scheme post Superannuation age | It is mandatory for you to exit from the scheme and invest in annuity at retirement | In NPS, you have the flexibility to continue investments till the age of 75 years as well |
How to migrate your Superannuation funds to NPS?
HDFC Pension provides end to end support to subscribers as well as corporates willing to launch NPS for their employees and also with migration of the Superannuation funds to NPS.
If you are a retail subscriber willing to transfer your Superannuation corpus to NPS or if you are a corporate nodal officer or from the payroll team, write to us as [email protected] to know more.