PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

CIRCULAR

PFRDA/2019/12/ REG-PF/1

Date: 8th May, 2019

SUBJECT: Introduction of choice of Pension Funds and Investment Pattern in Tier-I of NPS for Central Government subscribers – reg.

Reference is invited to the Gazette Notification F.No.1/3/2016-PR dated 31 st January, 2019 issued by Ministry of Finance, Department of Financial Services, modifying Ministry of Finance’s Notification No. 5/7/2003-ECB dated 22nd December, 2003, based on the Government’s decision on the recommendations of a Committee set up to suggest measures for streamlining the implementation of National Pension System (NPS).

Accordingly, it has been decided to introduce the following options for Central Government subscribers:

(i) Choice of Pension Fund: As in the case of subscribers in the private sector, the Government subscribers shall also be allowed to choose anyone of the pension funds including Private sector pension funds. They could change their option once in a year. However, the current provision of combination of the Public-Sector Pension Funds will be available as the default option for both existing as well as new Government subscribers.

(ii) Choice of Investment pattern: The following options for investment choices shall be offered to Government employees:

(a) The existing scheme in which funds are allocated by the PFRDA among the three Public Sector Undertaking fund managers based on their past performance in accordance with the guidelines of PFRDA for Government employees shall continue as default scheme for both existing and new subscribers.

(b) Government employees who prefer a fixed return with minimum amount of risk shall be given an option to invest 100% of the funds in Government securities (Scheme G).

(c) Government employees who prefer higher returns shall be given the options of the following two Life Cycle based schemes:

(A) Conservative Life Cycle Fund with maximum exposure to equity capped at 25% – LC-25.
(B) Moderate Life Cycle Fund with maximum exposure to equity capped at 50% – LC-50.

The subscribers may exercise one of the above choices of Investment Pattern twice in a financial year.

(iii) Implementation of choices to the legacy corpus: Transfer of a huge legacy corpus of more than Rs. 1 lakh crore in respect of the Government sector subscribers from the existing Pension Fund Managers is likely to impact the market. It may be practically difficult for the PFRDA to allow Government subscribers to change the Pension Funds or investment pattern in respect of the accumulated corpus, in one go. Therefore, for the present, change in the Pension Funds or investment pattern is allowed in respect of incremental flows only.

(iv) Transfer of legacy corpus in a reasonable time frame: PFRDA shall draw up a scheme in due course for transfer of accumulated corpus as per new choices of Government subscribers in a reasonable time frame of say five years. Once PFRDA draws up this scheme, change in the Pension Funds or investment pattern shall be allowed in respect of the accumulated corpus in accordance with that scheme.

• For investment option as per para 2 (ii) (a) above, all other terms and conditions as contained in the investment guidelines issued by the Authority dated 03.06.2015 for NPS Schemes (Applicable to Scheme CG, Scheme SG, Corporate CG and NPS Lite Schemes and APY) and subsequent amendments made thereto shall be applicable. Further, for investment options as per para 2 (ii) (b) or 2 (ii) (c) (A) or 2 (ii) (c) (8) above, all other terms and conditions as contained in the investment guidelines issued by the Authority dated 04.05.2017 in respect of NPS Schemes {Other than Govt. Sector (CG & SG), Corporate CG, NPS Lite and APY} and subsequent amendments made thereto shall apply.
  
• This circular is issued in exercise of powers of the Authority under sub-clause (b) of sub-section (2) of Section 14 read with Section 23 of the PFRDA Act, 2013 and sub regulation (1) of Regulation 14 of the PFRDA (Pension Fund) Regulations, 2015.

The above arrangements are applicable w.e.f. 1st April, 2019.

(A. G. Das)
Executive Director

Source: PFRDA

The post Pension Funds and Investment Pattern in Tier-I of NPS for Central Government subscribers appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Function of NPS Nodal Offices in Central Government

Nodal Office means the offices which act as interface between the subscribers and the central record keeping agency and shall include the Principal Accounts Office (PrAO), Pay and Accounts Office (PAO) and Drawing & Disbursing Office (DDO) under the Central Government or analogous offices under Central Government.

NPS – Hierarchy of Nodal Offices in Central Govt.

PrAO
PAO
DDO
^
^
Subscriber

Central Government hierarchy of Nodal Offices

Function of NPS Nodal Offices in Central Government Employees

1. Drawing and Disbursing Officer

Functions of DDO:

DDO will collect all the registration forms and forward it CRA for registration of the same. Further, it will also send the change request forms from the Subscribers and forward it to PAO for updation in NPSCAN system. However, DDO shall have various other functions as mentioned below:

Obtain the duly filled Application for allotment of PRAN from the subscribers, fill and certify the employment details.

Consolidate Application for allotment of PRAN and forward it to PAO.

Distribution of PRAN kit, I-Pin, T-Pin to Subscribers.

Forward the Switch requests, New Scheme Preference requests, Change in subscriber details request, Withdrawal Requests received from Subscribers to the PAO.

Providing information to PAO about Subscribers’ pension contribution.

Forward the grievance of the subscriber to the PAO.

DDO shall register itself with CRA before it starts providing various services to the Subscribers. For registering itself in CRA system, DDO shall forward the applications for registration to the concerned PAO.

2. Pay and Accounts Office

Functions of PAO

PAO will be responsible for carrying out the following activities:

Consolidate DDO registration form and forward it to CRA for registration.
Facilitate registration of Subscribers by consolidating the Application for allotment of PRAN received from the concerned DDO and forward it to the CRA – F.C.

Upload Subscriber Contribution File (SCF) to NPSCAN system. SCF will contain subscriber wise details of pension contribution such as PRAN, Pay month and year, Subscriber Contribution amount and Government Contribution amount etc.

PAO will deposit the contribution amount in the Trustee Bank as per the SCF uploaded in NPSCAN. This contribution amount will be invested in 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 subscriber.

PAO will resolve the grievance raised against it by any entities in the CRA system.

However, before performing the above-mentioned functions, PAO shall have to register itself with CRA. For registering itself in CRA system, PAO shall forward the applications for registration to the concerned Pr.AO.

3. Principle Accounts Office

A Principal Accounts Office will have several functions in the NPS. However, most of them will be in the nature of monitoring the performances of the Nodal offices under its jurisdiction. CRA will send various alerts to Pr.AO to facilitate it to carry out the role of a supervisory entity.

Functions of Pr.AO:

Pr.AO will be responsible for carrying out the following activities.

Consolidate PAO registration form and forward it to CRA for registration

Monitor performance of PAO and DDO in discharging their responsibilities in CRA system.

Monitor the resolution of grievances raised against PAO.

Take necessary action to ensure compliance of PAO and DDO with the operational procedures of CRA system

Pr.AO, in its capacity of a Nodal Office shall register itself with CRA. Further, Pr.AO will send the registration applications of the PAOs attached to it to CRA.

The post NPS – Central Government hierarchy of Nodal Offices appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Is the choice of Pension Fund and Investment Pattern available for Subscriber under Tier I?
As per Ministry of Finance Gazette Notification dated January 31, 2019, the Central Government Subscribers, from April 1, 2019, will have the option of selecting the Pension Funds (PFs) and Investment Pattern in Tier I account. A Subscriber can choose anyone of the available PFs and Investment Option as per their choice. If the choice is not exercised by the Sub scriber, NPS contributions will be invested in the existing schemes – LIC, SBI and UTI will act jointly as default P Fs as per the guidelines issued by the Government of India/ PFRDA. For more details on ‘Investment Option ‘, please refer ‘Information on Scheme Preference’ available on CRA website (www.npscra.nsdl.co.in).

Is the choice o f Pension Fund and Investment Pattern can be exercised at the time of registration under NPS?
Yes, a Subscriber is allowed to select the Pens ion Fund and Investment Pattern as per his/ her choice at the time of registration under NPS. The Subscriber is required to provide the relevant details in the Subscriber Registration Form (CSRF).

What are the Investment Options available for Subscriber under Tier I?
The Subscriber can select anyone of the following investment schemes:

• Scheme G – 100% of contribution will be invested in Government Bonds and related instruments.
• Scheme LC 25 – It is the Life cycle fund w here the Cap to Equity investments is 25% of the total asset.
• • Scheme LC 50 – It is the Life cycle fund w here the Cap to Equity investments is 50% of the total asset.

If the choice is not exercised by tile Subscriber, NPS contributions will be invested in the existing schemes – LIC, SBI a/ld UTI as per the guidelines
issued by the Government of India/ PFRDA. For more details on ‘Investment Option’, please refer ‘Information on Scheme Preference’ available on CRA Website (www.npscra.nsdl.co.in).

How can a Subscriber change a Scheme Preference?
There are two options available to the Subscriber – Online as well as offline.

Online: The Subscriber can change Scheme Preference online through his/her NPS account log-in. Subscriber Call follow the simple steps as given below :

a. Go to your NPS account and log-in .
b. Click on sub menu “Scheme Preference Change” under main menu “Transaction”.
c. Select Tier type and Change the Scheme Preference as you intended to do.

Alternatively, the Subscriber can also submit physical request (Form GOS-S3) to his/her associated Nodal Office. The form GOS-S3 can be freely
downloaded from CRA Website. On receipt of physical request, the Nodal Office will update the Scheme Preference in the CRA system.

How many times a Subscriber can change ‘Scheme Preference’ ?
Yes, you have the option to change your Pension Fund manager. At present, the Subscriber can change the Pension Fund Manager once in a Financial Year.

‘What will happen to the contributions accumulated in NPS account till March 31,2019?
The legacy contributions i.e. contributions accumulated in NPS account till March 31,2019 will remain invested in the existing schemes – LIC, SBI and UTI will act jointly as default PFs as per the guidelines issued by the Government of India (GOI)/ PFRDA. Redemption and transfer of accumulated contributions will be carried out once guidelines and modalities are provided by GOI/ PFRDA.

Will there be any change in the Transaction Statement?
Yes. Transaction Statement will undergo a change for the PRANs having legacy contributions i.e. contributions accumulated in NPS account till March 31, 2019. For the Subscribers who have opted new schemes, the Investment details of the legacy schemes, and of the new scheme will be shown it two separate tables in the Transaction Statement.

Whether Subscriber can select ‘Scheme Preference’ at the time of shifting to Central Government?
The Subscriber will have the option of selecting the Pension Funds (PFs) and Investment Pattern in Tier I account at the time of shifting to Central Government. The Subscriber is required to provide the relevant details in Inter Sector Shifting (ISS) Form.

Whether a Non-IRA Subscriber can change ‘Scheme Preference’ under NPS?
At present, Non-IRA Subscribers do not have the option of ‘Scheme Preference’ change. A Non-IRA Subscriber should first submit the physical registration form to become an IRA compliant Subscriber. Once he / she becomes IRA, the Subscriber can change the Scheme Preference .

Is the choice of Pension Fund and Investment Pattern available for Subscribers under Central Autonomous Bodies (CABs)?
At present, the Subscribers under CABs do no t have the option of selection of Pension Fund and Investment Pattern under NPS. In case of CABs, NPS contributions will be invested in the existing schemes – LIC, SBI and UTI as per the guidelines issued by the Government of India / PFRDA.

The post FAQ for Scheme Preference under NPS for Central Government Subscribers appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.