National Pension System (NPS)ensuring old age income security for all

Why Pension?

All your life, you have worked to support yourself. You have been self-reliant. In old age, you do not want to depend upon others for your sustenance, food, clothes and medicines.

If you save towards pension today, you will have a monthly income when you stop working. Even Rs.100 per month, saved from the age of 30 years onwards would yield an estimated corpus of Rs.1,49,035 @8% rate of return, at the age of 60 years. If rate of return is more, the corpus will grow more. The earlier you join, the returns on your savings will be higher. NPS Lite aims at ensuring a pension of at least Rs 1000 per month based on your contributions and government support under Swavalamban Scheme.

What is NPS-Lite? NPS was initially for Government employees, and was later extended to all citizens of India. Recognizing the need to provide income security to marginal income earners and to people from economically disadvantaged sections of society, a scheme has been launched exclusively for such sections of society. NPS-Lite is a scheme of the Government of India and PFRDA. What is Swavalamban? As part of the Governments initiative towards Financial Inclusion, the Finance Minister has announced a new scheme called Swavalamban to encourage subscribers to take the all important step of saving for their old age, where Govt of India will also contribute Rs 1000 per year to the pension account ( for details please see reverse)

NPS Pension Pension is for you and me!!nahi

yeh pran hai..

NPS Lite- Making pension possible

for the economically disadvantaged

Features of Swavalamban/NPS-Lite
Each subscriber will get an identity card with his photograph, name and signature, known as PRAN Card. This card establishes his/her membership of the Swavalamban/NPS-Lite scheme. Each subscriber can contribute as little as Rs. 100 per month. There is no fixed monthly contribution. Contribution can be made, whenever the subscriber is comfortable and has the necessary disposable income. To avail of the benefit of Rs. 1000 in each of these years 2010-11, 2011-12, 2012-13 and 2013-14 the subscriber has to deposit a minimum of Rs 1000 and a maximum of Rs 12000 during each of these years. Money will be collected by organizations, known as Aggregators, who have been approved by PFRDA. The list of Aggregators, who have been approved for collection of contributions of Swavalamban/NPS-Lite scheme, will be displayed on the PFRDAs website: www.pfrda.org.in. The Aggregator will collect the money, and issue a receipt to the subscriber. The aggregator will deposit the collections every Friday (by uploading on the system) in a designated NPS-Lite Bank Account. If the subscriber registers his mobile telephone number in his application for PRAN Card, Central Recordkeeping Agency will send a sms in confirmation of receipt of money. At present, Swavalamban/NPS-Lite scheme is the extension of the scheme, which is available to the Government servants, i.e., 85% of the money will be invested in debt and 15% will be invested in equity as per the Government guidelines. i) A subscriber can choose any of the following fund managers: SBI, UTI, ICICI, Reliance, Kotak and IDFC. (ii) Alternatively, a subscriber can choose 3 PFMs viz. SBI, UTI and LIC. The money will be bifurcated amongst the fund managers at a ratio determined by PFRDA. Once a year, a statement of account of the entire transaction and the market value of the corpus will be sent to the aggregator for distribution to the subscribers. a) At the age of 60, the subscriber can withdraw 60% of the pension wealth in lump sum and a minimum 40% of the pension wealth to be annuitized. Exit before age 60 years requires a minimum annutization of 80% of the pension wealth. (b) If the annuitized pension wealth does not yield an annuity of Rs 1000 per month, the percentage of pension wealth to be annuitized would be increase so that the pension amount becomes Rs 1000 per month, failing which the entire pension wealth would be subject to annutization. This minimum pension sealing may be revised from time to time. In case of death of the subscriber, the entire money can be withdrawn by his/her heirs immediately, without annuitizing any portion of the corpus.

Costs of the Scheme :

The Swavalamban/NPS-Lite account provides security and gives complete details of all transactions to the subscriber. Each subscribere will have a separate Individual Retirement Account. This account will show the investments made and the NAV of the corpus. At the time of joining, the subscriber will pay a one-time cost of Rs. 35 for obtaining a PRAN Card. Every year, Rs. 70 per annum will be deducted from the NAV of the NPS account for meeting the cost of recordkeeping.

Subscriber Support
There is a Central Grievance Management System (CGMS)under which any subscriber can either log his/her complaint through his/her Aggregator, or can send a written complaint to PFRDA or CRA. This complaint will be monitored by PFRDA and CRA. The subscriber can also access his aggregator, and ask to see his account on the computer to see that his contributions have been properly recorded.

Swavalamban gives you Rs. 1000 per year for this and next 3 years to help you start your pension corpus. The Finance Minister has announced a new scheme Swavalamban in the Budget 2010. To avail of Swavalamban benefit, you need to invest between Rs. 1000 12,000 per year for each of these years.

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