Investment Options:

In NPS, a Corporate has flexibility to provide investment scheme preference (PFM and Investment choice) either at subscriber level or at the corporate level centrally for all its underlying subscribers.

Selection of PFM:

  • HDFC Pension Management Company Ltd.
  • LIC Pension Fund Limited
  • ICICI Prudential Pension Funds Management Company Limited
  • Kotak Mahindra Pension Fund Limited
  • DSP BlackRock Pension Fund Managers Private Limited
  • Reliance Capital Pension Fund Limited
  • SBI Pension Funds Private Limited
  • UTI Retirement Solutions Limited

Investment Choice for Asset Allocation:

The Corporate as well as Subscriber can have any of the two choices for their asset allocation:

  • Active Choice:Corporate/ Subscriber as the case may be will have the option to actively decide as to how his NPS pension wealth is to be invested across Asset class E (upto 50%), Asset Class C, and Asset Class G.
  • or
  • Auto Choice: In this option, the investments will be made in a life-cycle fund. Here, the fraction of funds invested across three asset classes will be determined by a pre-defined portfolio (which would change as per age of subscriber).
  • NOTE:
    • Asset Class E - Investment in predominantly equity market instrument.
    • Asset Class C -Investment in fixed income instruments other than Government Securities
    • Asset Class G - Investment in Government Securities.

Account Option:

Under NPS following two types of accounts will be available:

Tier-I account: Employer / Employee can contribute for retirement into this non-withdrawal account. Income Tax benefits as per the Income Tax Act, 1961 are available for both employer and employee contributions.

Tier-I charges can be borne either by Corporate or Subscriber, at the discretion of Corporate.

Tier-II account: This is a voluntary savings facility, where the subscriber can avail Fund Management facility at very low costs. Subscriber will be free to withdraw savings from this account whenever they wish. However, the tax benefits are not applicable for Tier-II account.

Tier-II account can be activated along with the Tier-I account or at a later date. However, The POP for activating Tier-II account should be same as Tier-I account. The Request Form for activation of Tier-II account at the time of registration is CS-S1 (composite corporate subscriber registration form) or if activated at a later date, UOS-S10 as applicable under 'All citizens Model'.

Tier-II transaction charges are same as Tier-I, however it will be borne by subscriber only.

The investment option for the Tier-II account can be exercised by the subscriber only, which can be different from tier-I account.

Tier II accumulations can be switched to Tier I account but not vice versa.

Flexible Contribution

The NPS platform allows all three variations of contributions from employer and employee:

  • Equal contributions by employer and employee
  • Unequal contribution by the employer and the employee
  • Contribution from either the employer or the employee

Minimum Contributions (For Tier-I)

Minimum amount per contribution - Rs 500

Minimum contribution per year - Rs 6,000

Minimum number of contributions - 01 per year

Minimum Contributions (For Tier-II)

Minimum contribution at the time of account opening - Rs 1000

Minimum amount per contribution - Rs 250

Minimum balance of Rs. 2000/- at the end of each financial year

Minimum number of contributions - 01 per year