NPS Tier II with Default Scheme for Government Sector Subscribers – Additional Investment Option: PFRDA Circular dated September 22, 2023 | Staff News

NPS Tier II with default scheme for government sector subscribers – Additional investment options with flexibility and convenience to suit your unique requirements: PFRDA Circular dated September 22, 2023

Pension Fund Regulatory and Development Authority

Round

Circular number: PFRDA/2023/27/Sup-CRA/08

September 22, 2023

to
All NPS stakeholders and government sector subscribers

Subject: NPS Tier II -reg with default scheme for government sector subscribers

As part of PFRDA’s continued efforts to provide enhanced investment avenues under NPS, it has been decided to introduce NPS Tier Il default scheme exclusively for government sector subscribers.

2. Government sector subscribers under NPS will be given additional investment options in the default scheme in addition to the existing Scheme E / Scheme C / Scheme G investment options.

3. The NPS Tier II default scheme represents a significant step forward in meeting the diverse financial aspirations of government sector subscribers. The scheme is designed to provide flexibility and convenience to suit the unique requirements of government sector subscribers.

4. Government sector subscribers may continue with the default scheme under Tier II even after transferring their account to another sector.

5. Key benefits of NPS Tier II account:

1. Increased flexibility: Tier II has no mandatory annual contribution requirements. Participants can open an account by paying a minimum contribution. There is no limit to the amount you can donate in Tier II.
2. easy withdrawal: Tier II accounts allow subscribers to withdraw money at any time. This is a convenient way for subscribers to access savings when they need them most.
3. seamless transfer: If the member wishes to transfer funds to the main pension account (Tier I), he or she may do so at any time. This feature ensures that your investments remain dynamic and can adapt to your changing needs.
4. No minimum balance: There is no requirement to maintain a minimum balance in your NPS Tier II account. It gives you the freedom to contribute as much as you want.
5. Individual nomination function: Participants can designate individual beneficiaries for Tier II accounts if desired.
6. Default investment scheme: The functionality of Tier I Default Investment Scheme has been extended to Tier II accounts of government sector subscribers. This will enable the subscriber to access a simplified default investment scheme similar to Tier I without having to actively choose an investment scheme or her PF.
7. Easy onboarding: To participate in Tier II and select the default scheme, the subscriber must provide consent or request to the CRA through the relevant nodal office. Online and electronic modes of consent are available on the CRA portal for subscribers.

6. Government sector subscribers associated with Protean CRA can complete the account activation process on the Protean e-NPS website. If a subscriber already has Tier II and would like to select her default scheme for Tier II, she can do the same through the change scheme settings option available at subscriber login. Over 700 subscribers have already selected the Tier II default scheme.

Tier II features with default selection will also be available soon for subscribers associated with KFin CRA.

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

Sincerely,
digital signature by
K. Mohan Gandhi
chief general manager

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