National pension system(NPS)
Published on: Mar 3, 2016
Transcripts - National pension system(NPS)
National Pension System(NPS)
• Government of India has introduced a new
Defined Contribution Pension Scheme replacing
the existing system of Defined Pension System
vide Government of India, Ministry of Finance
Department of Economic Affairs Notification
dated 22.12.2003. The New Pension Scheme
(now known as National Pension System) came
into operation with effect from 01.01.2004 and is
applicable to all new entrants to Central
Government service, except to Armed Forces,
joining Government service on or after
• All PCsDA/CsDA/PC of A (Fys)/CFA (Fys)
functions as Pr. AO under the New Pension
• Area Accounts Offices, Branch Accounts
Offices, PAO (ORs), AO GEs/AAO GEs etc.
which are pre-auditing/maintaining the pay
bills of Defence Civilians/GREF personnel
including pay bills of DAD employees will
function as PAO.
Functions of the PAO
– Consolidate DDO registration form and forward it to CRA
– Facilitate registration of subscribers by consolidating the
application for allotment of PRAN received from the
concerned DDO and forward it to the CRA-FC.
– Upload subscriber Contribution File (SCF) to NPSCAN
– PAO will deposit the contribution amount in the Trustee
Bank as per the SCF uploaded in NPSCAN. This
contribution amount will be invested in the various
schemes of PFM, based on the scheme preference of
subscribers for which SCF has been uploaded.
– PAO will update through NPSCAN, the Switch
requests, New Scheme Preference requests,
Withdrawal Requests, the request for change in
subscriber details received from subscribers.
– PAO will raise grievance on behalf of DDO and the
– PAO will resolve the grievance raised against it by
any entities in the CRA system.
Preparation of SCF (Subscriber’s Contribution File)
• Under the existing system the monthly contribution details
have to be uploaded on the NSDL web site (NPSCAN) using the File
Preparation Utility & File Validation Utility. The Subscriber’s
Contribution File includes the following details.
• PRAN (Permanent Retirement Account Number)
• DDO ID
• PAO ID
• Contribution Details
• Month and year of specific contribution record.
The system would generate a Transaction ID and Contribution
Submission Form. The PAO will have to deposit the contribution
through NEFT/RTGS only along with contribution Submission Form
to the Trustee Bank.
Accounting of NPS
• The recovery made on account of individual
contribution and equal matching Govt.
contributions will be compiled to relevant
code heads as under:-
• 00/016/04 (Government Servant Contribution
• 00/016/05 (Government Contribution under
Registration of New entrants to Central Govt. service
• As per SOP for registration prepared by NSDL, the
DDOs have been entrusted with the responsibility of
the registration of the subscribers (new entrants).
Immediately on joining Govt. service the subscriber
should fill the application (Form S1) for allotment of
PRAN and submit it to DDO. DDO too should ensure
that the duly filled applications are received from
subscribers within seven days of joining and
forwarded to the concerned PAO for onward
transmission to CRA/CFA-FC for allotment of PRAN
which is essential for transfer of subscribers’ data to
NSDL and remittance of subscription amount to
Trustee Bank by the PAO in the CRA system.
Refund under NPS
– Exit from NPS upon attaining the age of Normal superannuation: At
least 40% of the accumulated pension wealth of the subscriber needs
to be mandatorily utilized for purchase of an annuity providing or the
monthly pension of the subscriber and the balance is paid as a lump
sum payment to the subscriber.
– Exit from NPS before attaining the age of Normal superannuation: At
least 80% of the accumulated pension wealth of the subscriber needs
to be utilized for purchase of an annuity providing for the monthly
pension of the subscriber and the balance is paid as a lump sum
payment to the subscriber.
– Upon Death: The entire accumulated pension wealth (100%) would be
paid to the nominee/legal heir of the subscriber.
– In case of ‘technical resignation’ of NPS subscribers, no withdrawal
may be permitted and the balance outstanding in their personal
retirement account and along with PRAN may be carried forward, as
the retirement account of NPS is portable amongst jobs.