Central government employees who joined as a part of the contributory New Pension Scheme (NPS) have earned a weighted average return of 14.82 per cent during 2008-09,

  Central government employees who joined as a part of the contributory New Pension Scheme (NPS) have earned a weighted average return of 14.82 per cent during 2008-09, the first year when three fund managers managed a corpus of around Rs 2,000 crore. This has outperformed any another form of
Investment like PF etc. Its a Win Win situation for both Govt as well as  Employees. This is in contrast to the annual 8 per cent returns between January 2004  and March 2008 when the government had not transferred the money to the  three fund managers – SBI Pension Fund, UTI Retirement Solutions and LIC
Pension Fund.

   The Centre moved all employees joining from January 1, 2004 to NPS, where  they have to chip in with a contribution of 10 per cent of their basic  salary with a matching contribution made by the government. While the money  was being deducted, it was parked in a government account and earned a fixed  rate of return. While the corpus will increase this year, partly due to higher  contribution and also due to the release of some of the arrears following  the implementation of the Sixth Pay Commission’s recommendations, the equity  investment is also expected to go up. At present, around 5 per cent of the corpus is invested in equities against the permissible limit of 15 per cent.

   This year onwards, the fund management fee is also going to decrease to  0.0009 per cent (or 0.09 basis points), in line with the pension scheme for  non-government employees, as against up to 5 basis points last year. In addition, state governments are expected to join the scheme. While 21  states have shown their willingness to join NPS, none of them have started  releasing the funds as some of them, unlike the Centre, are reluctant to  bear the costs, such as those rela

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‘Swavalamban’ initiative to accelerate NPS yet to pick up

Despite government initiatives, the NPS has not generated enough interest among the masses. What needs to be done to prop up this excellent scheme?Investors have not responded with much enthusiasm to the ‘Swavalamban’ initiative extended by the government under which it will contribute Rs1,000 per year (for a period of four years) to every New Pension Scheme (NPS) account opened this year with at least a matching contribution from the subscriber. Citizens in the non-government segment continue to abstain from investing in the NPS. The number of  non-government subscribers to NPS registered as of 30 April 2010
has touched 5,532. Although the figure is more than double that of October 2009 when non-government subscribers were 2,321, the absolute numbers are still small. The total central government employees registered under the NPS have gone up to 6,09,376 from 5,38,276 in October last year. However, there has been a large increase in numbers from among the state government employees during the same period. The number of subscribers under this category rose to 2,55,903 from the earlier 1,10,024.An officer from one of the point of presence service providers (PoP-SP) pointed out that there have been no significant additions since the budget announcement. He said, “The momentum has not picked up much despite various initiatives from the government and banks. We have been told that this product should be bought and not sold. So we are not expected to advise customers in any way. The policy is that we wait for the customers to approach us. We are fully equipped and ready to accept subscriptions in the NPS.”Incidentally, this PoP-SP has commissioned more than 300 of  its branches to provide NPS registration facilities to thesubscribers. Several other banks have also mobilised a chunk of personnel and designated a part of their infrastructure for catering to the NPS subscriptions. Another PoP service provider confirmed, “Although there is an improvement in the NPS accounts, it is not as much as what was expected.”Commenting on what needs to be done to popularise the scheme, the official stated, “We need to approach private sector companies and talk to employees about the benefits of the scheme. The government could also probably offer a minimum dividend or guarantee as people may be worried about what they will end up with after so many years. Things will change if the scheme assures a minimum return.”Speaking about the possible actions being considered to promote the scheme, an official from the Pension Regulatory and Development Authority (PFRDA) said, “The Swavalamban initiative has seen a slow and steady rise from the earlier rate of enrolment. The first phase of implementation is almost over. We are now looking at various promotional and monetary incentives for enrolment. We are considering media campaigns and
strengthening the regulatory mechanism through monitoring the PoPs more closely and how to make them promote the scheme better.”The still lukewarm response to the NPS is unfortunate considering that it is a product that is actually tailor-made for the requirements of the masses. It is among the least expensive balanced investment products in the market and the cheapest pension product in the offing, which would make a huge difference to long-term wealth.Lack of confidence in the product is also a mitigating
factor. Investors are wary about how much they will end up with after the contribution period. Investors should be advised by the PoPs regarding the portfolio allocation to debt and equity before investing. Awareness among the masses still remains a concern for the pension regulator and hence, its plans to
promote the scheme need to take shape for the NPS to achieve its true potential.

SOURCE - MONEYLIFE.IN

read more...

‘Swavalamban’ initiative to accelerate NPS yet to pick up

Despite government initiatives, the NPS has not generated enough interest among the masses. What needs to be done to prop up this excellent scheme?Investors have not responded with much enthusiasm to the ‘Swavalamban’ initiative extended by the government under which it will contribute Rs1,000 per year (for a period of four years) to every New Pension Scheme (NPS) account opened this year with at least a matching contribution from the subscriber. Citizens in the non-government segment continue to abstain from investing in the NPS. The number of  non-government subscribers to NPS registered as of 30 April 2010
has touched 5,532. Although the figure is more than double that of October 2009 when non-government subscribers were 2,321, the absolute numbers are still small. The total central government employees registered under the NPS have gone up to 6,09,376 from 5,38,276 in October last year. However, there has been a large increase in numbers from among the state government employees during the same period. The number of subscribers under this category rose to 2,55,903 from the earlier 1,10,024.An officer from one of the point of presence service providers (PoP-SP) pointed out that there have been no significant additions since the budget announcement. He said, “The momentum has not picked up much despite various initiatives from the government and banks. We have been told that this product should be bought and not sold. So we are not expected to advise customers in any way. The policy is that we wait for the customers to approach us. We are fully equipped and ready to accept subscriptions in the NPS.”Incidentally, this PoP-SP has commissioned more than 300 of  its branches to provide NPS registration facilities to thesubscribers. Several other banks have also mobilised a chunk of personnel and designated a part of their infrastructure for catering to the NPS subscriptions. Another PoP service provider confirmed, “Although there is an improvement in the NPS accounts, it is not as much as what was expected.”Commenting on what needs to be done to popularise the scheme, the official stated, “We need to approach private sector companies and talk to employees about the benefits of the scheme. The government could also probably offer a minimum dividend or guarantee as people may be worried about what they will end up with after so many years. Things will change if the scheme assures a minimum return.”Speaking about the possible actions being considered to promote the scheme, an official from the Pension Regulatory and Development Authority (PFRDA) said, “The Swavalamban initiative has seen a slow and steady rise from the earlier rate of enrolment. The first phase of implementation is almost over. We are now looking at various promotional and monetary incentives for enrolment. We are considering media campaigns and
strengthening the regulatory mechanism through monitoring the PoPs more closely and how to make them promote the scheme better.”The still lukewarm response to the NPS is unfortunate considering that it is a product that is actually tailor-made for the requirements of the masses. It is among the least expensive balanced investment products in the market and the cheapest pension product in the offing, which would make a huge difference to long-term wealth.Lack of confidence in the product is also a mitigating
factor. Investors are wary about how much they will end up with after the contribution period. Investors should be advised by the PoPs regarding the portfolio allocation to debt and equity before investing. Awareness among the masses still remains a concern for the pension regulator and hence, its plans to
promote the scheme need to take shape for the NPS to achieve its true potential.

SOURCE - MONEYLIFE.IN

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CITU DENOUNCES UNILATERAL CURTAILING PENSION BENIFITS

   The Centre of Indian Trade Unions denounces the unilateral action by the Govt
of India in amending the Employees Pension Scheme to drastically reduce the
pension benefits of the early retirees (retired or separated before 58 years )
vide Labour Ministry notification no GSR 546(E) dated 23rd July 2009.

    In the face of millions of workers losing livelihood owing to recession since
last six months, this move of the Govt would further squeeze the workers
rendered jobless before the retirement age for no fault of theirs, of their
legitimate pension benefit.

    While issuing this amendment notification, the Govt ignored the statutory
Tripartite Forum—the Central Board of Trustees of Employees Provident Fund
Organisation, responsible for administering the Employees Pension Scheme,
thereby making a mockery of principle of tripartism.

    This is the second unilateral move for curtailing the pension benefit of the
workers within a span of one year. The first move by the same UPA regime had
been in September 2008 in the same manner ignoring the statutory tripartite
forum, which rewarded the defaulting employers on the one hand by drastically
reducing the penalty for default and simultaneously curtailing the pension
benefit of the workers by way of withdrawal of commutation facility and
withdrawal of the option for availing combination of reduced pension and return
of capital besides reducing the pension amount for the early-pensioners.

    The second one is through the recent executive order which would deprive the
worker who has rendered 20 years service but has to retire or lose his job
prematurely from the provision of weightage benefit in pensionable service on
which pension is calculated. The millions of workers losing job prematurely
owing to recession, who deserve urgent support and relief from the Govt, would
be cruelly squeezed further while the employers continue to enjoy stimulus
package funded by public exchequer. And through this action, the patently
anti-worker anti-people character of the Govt stands thoroughly exposed.

    CITU condemns such anti worker action by the Govt and calls upon the working
class to force the Govt to rescind the notification through united struggle.

SOURCE - CITU

read more...

CITU DENOUNCES UNILATERAL CURTAILING PENSION BENIFITS

   The Centre of Indian Trade Unions denounces the unilateral action by the Govt
of India in amending the Employees Pension Scheme to drastically reduce the
pension benefits of the early retirees (retired or separated before 58 years )
vide Labour Ministry notification no GSR 546(E) dated 23rd July 2009.

    In the face of millions of workers losing livelihood owing to recession since
last six months, this move of the Govt would further squeeze the workers
rendered jobless before the retirement age for no fault of theirs, of their
legitimate pension benefit.

    While issuing this amendment notification, the Govt ignored the statutory
Tripartite Forum—the Central Board of Trustees of Employees Provident Fund
Organisation, responsible for administering the Employees Pension Scheme,
thereby making a mockery of principle of tripartism.

    This is the second unilateral move for curtailing the pension benefit of the
workers within a span of one year. The first move by the same UPA regime had
been in September 2008 in the same manner ignoring the statutory tripartite
forum, which rewarded the defaulting employers on the one hand by drastically
reducing the penalty for default and simultaneously curtailing the pension
benefit of the workers by way of withdrawal of commutation facility and
withdrawal of the option for availing combination of reduced pension and return
of capital besides reducing the pension amount for the early-pensioners.

    The second one is through the recent executive order which would deprive the
worker who has rendered 20 years service but has to retire or lose his job
prematurely from the provision of weightage benefit in pensionable service on
which pension is calculated. The millions of workers losing job prematurely
owing to recession, who deserve urgent support and relief from the Govt, would
be cruelly squeezed further while the employers continue to enjoy stimulus
package funded by public exchequer. And through this action, the patently
anti-worker anti-people character of the Govt stands thoroughly exposed.

    CITU condemns such anti worker action by the Govt and calls upon the working
class to force the Govt to rescind the notification through united struggle.

SOURCE - CITU

read more...

NEW PENSION SCHEME- FAQ

1. What is the New Pension System (NPS)?
   The NPS is a new contributory pension scheme introduced by the
Central Government for its own new employees. Under the new pension system, each
new central government employee will open a personal retirement account on
joining service. Every month, and till the employee retires or leaves government
service, a part of the employee's salary will be transferred into this account.
When the person retires, he will be able to use these savings to take care of
the needs and expenses of his family during old age.

2. Who is covered by the NPS?
 You are covered by the NPS if a.You joined central government service
on or after 01 January 2004, andb.You are an employee of a Central (Civil)
Ministry or Departments, orc.You are an employee of a non-civil Ministry or
Department including Railways, Posts, Telecommunication or Armed Forces (Civil),
ord.You are an employee of an Autonomous Body, Grant-in-Aid Institution, Union
Territory or any other undertaking whose employees are eligible to a pension
from the Consolidated Fund of India.

3. If I joined Central Government service on or after 01 January 2004 do I have an option of not being covered by the NPS?
 No. The NPS is mandatory for you

.4. I am covered by the NPS. Do the old Pension Rules apply to me?
No. The Central Civil Service Pension Rules (1972) do not apply to you. You are covered
only by the New Pension System Rules framed for the NPS

5. I am covered by the NPS. Can I contribute to the GPF?
No. The General Provident Fund (Central Service) Rules, 1960 also do not
apply to you. You will not be permitted to contribute towards GPF.

6. Am covered by the NPS. Am I eligible to Gratuity?
No. You will not be eligible to Gratuity.

7. How does the NPS work?
When you join Government service, you will be allotted a unique Personal
Pension Account Number (PPAN). This unique account number will remain the same
for the rest of your life. You will be able to use this account and this unique
PPAN from any location and also if you change your job. The PPAN will provide
you with two personal accounts:1. A mandatory Tier-I pension account, and2. A
voluntary Tier-II savings account.

8. What is the difference between Tier-I and Tier-II accounts?
1. Tier-I account: You will have to contribute 10% of your basic+DA+DP into
your Tier-I (pension) account on a mandatory basis every month. You will not be
allowed to withdraw your savings from this account till you retire at age 60.
Your monthly contributions and your savings in this account, subject to a
ceiling to be decided by the government, will be exempt from income tax. These
savings will only be taxed when you withdraw them at retirement.2. Tier-II
account: This is simply a voluntary savings facility for you. Your contributions
and savings in this account will not enjoy any tax advantages. But you will be
free to withdraw your savings from this account whenever you wish.

9. How will I contribute to my Tier-I (pension) account?
Every month, the government will deduct 10% of your salary (basic+DA+DP) and
automatically transfer this amount to your Tier-I account in your name.

10. Will the Government contribute anything to my Tier-I (pension) account?
Yes. As your employer, the Government will match your contribution (10% of
basic+DA+DP) and transfer this amount also to your Tier-I account in your name.


11. Can I contribute more than 10 into my Tier-I account?
Yes. You will be permitted to contribute more than the mandated 10% of
Basic+DA+DP into your Tier-I account – subject to any ceiling that may be
decided by the Government.

12. Will the Government also contribute more than 10 into my Tier-I account?
No. The contribution of the Government will be limited to 10% of your
basic+DA+DP.

13. What will happen if I am transferred to another city or country?
The PPAN number will stay the same and you will be able to use the same
accounts from anywhere in the world.

14. If I leave Government service before I retire will the Government
continue to contribute to my Tier-I account?

No. The 10% contribution by the Government will stop when you leave
Government service. However, your savings in your Tier-I and Tier-II accounts
will stay in your name and you will be able to continue using these accounts to
save for your retirement.

15. What if I die or become permanently disabled during my service?
 Pl.refer Office Memorandum: Additional Relief on death/disability of
Government servants covered by the NPS(New Pension Scheme) recruited on or after
1.1.2004 No.38/41/06/P&PW(A) Dated 5th May, 2009

16. Where will my savings be invested?
Each PFM will offer you a limited number of simple, standard schemes. You
will be free to choose any of the following schemes for investing your savings:
Scheme A This scheme will invest mainly in Government bondsScheme B This scheme
will invest mainly in corporate bonds and partly in equity and government bonds
Scheme C This scheme will invest mainly in equity and partly in government bonds
and corporate bonds.

17. I am covered by the NPS. Do the old Pension Rules apply to me?
No. The Central Civil Service Pension Rules (1972) do not apply to you. You
are covered only by the New Pension System Rules framed for the NPS.

18. I am covered by the NPS. Can I contribute to the GPF?
No. The General Provident Fund (Central Service) Rules, 1960 also do not
apply to you. You will not be permitted to contribute towards GPF.

19. Who will be responsible for the NPS and for protecting my interests?
The Government is setting up a new dedicated regulatory authority. This will
be named the Pension Fund Regulatory and Development Authority (PFRDA). The
PFRDA will be responsible for the NPS and for protecting your interests in the
NPS.

20. When will my contributions start?
Your contributions (and the matching contribution by the Government) towards
your Tier-I pension account will begin only from the month following the month
in which you join Government service. During the first month of your service,
you will be allotted the PPAN.(PRAN)

21. Who in the Government will issue me a PPAN open my accounts and be
responsible for the deductions?
When you join service, your Drawing and Disbursement Officer (DDO) will
instruct you to fill out a NPS form. You will be required to provide your full
professional and personal details including details of your nominee in this
form. The DDO will issue you the PPAN number(PRAN) and will also be responsible
for all administrative matters related to your NPS accounts including deduction
of your contributions, transferring your contributions and the matching
contribution of the Government to your Tier-I pension account.

22. What will happen to my contributions to my Tier-I account?
Your monthly contributions, and the matching contributions by the Government
into your Tier-I account, will be transferred by the Government in your name to
a Pension Fund Manager (PFM). The PFM will invest your contributions on your
behalf. In this way, your savings will earn an interest and grow over time.

23. Which agency will serve as a PFM?
The PFRDA will appoint a limited number of leading professional firms to act
as PFMs. One of these PFMs will be a public sector agency.

24. Who will decide which PFM manages my contributions and savings?
You will select a PFM to manage your contributions and savings.

25. Will I be permitted to select more than one PFM to manage my savings?
Yes. If you wish, you will be able to spread your savings across multiple
PFMs – where a part of your savings are managed by 2 or more PFMs.

26. Will I be permitted to change my PFM preference?
Yes. If you wish, you will be free to change the PFM and move all your
savings to another PFM of your choice.

27. Where will my savings be invested?
Each PFM will offer you a limited number of simple, standard schemes. You
will be free to choose any of the following schemes for investing your savings:
Scheme A This scheme will invest mainly in Government bondsScheme B This scheme
will invest mainly in corporate bonds and partly in equity and government bonds
Scheme C This scheme will invest mainly in equity and partly in government bonds
and corporate bonds

28. Will I be able to select more than one scheme?
Yes. You will be free to spread your savings across these three schemes.
Whenever you decide, you will also be free to switch your savings from one
scheme to another.

29. How will my contributions be transferred to the PFM and scheme selected
by me?
You will specify the PFM and scheme to your DDO. The DDO will arrange for
transfer of your contributions to the PFM(s) and scheme(s) that you have
selected.

30. What rate of return will my contributions earn?
Your contributions will not earn any specified rate of return. The PFM will
invest your savings in a scheme of your choice.The returns earned by the PFM on
the scheme selected by you will be credited to your account.

31. Will I have to pay any fees or charges under NPS?
You will have to pay a fee to the Central Recordkeeping Agency (CRA) which
will maintain your accounts and also to the PFM(s) which manage your savings.
These charges will be deducted from your savings on a periodic basis. The fees
and charges by the CRA and PFMs will be regulated by the PFRDA.

32. Can I contribute more than the 10 of basic+DA+DP into my TierI account at
the moment?
No. You will be allowed to do so only when the PFRDA, CRA and PFMs are
appointed.

33. What will happen to my contributions and earnings in my Tier-I account
when the PFRDA CRA and PFMs etc. are appointed?
Your full contributions, matching contributions by the Government, and the
interest earned on the same will be transferred in your name to the PFM and
scheme selected by you.

34. Will I have the option of continuing with the current 8 percent rate of
return?
No. Once your savings are transferred to the PFM, your savings will enjoy
only the rate of return earned by the PFM on scheme you have selected.

35. When will I be permitted to withdraw from my Tier-I account?
You will be able to withdraw your savings in your Tier-I account at age 60.

36. What will happen to my savings in the Tier-I account when I retire?
You will be able to withdraw 60% of your savings as a lumpsum when you
retire. You will be required to use the balance 40% of your savings to purchase
an annuity scheme from a life insurance company of your choice. The life
insurance company will pay you a monthly pension for the rest of your life.

37. Can I use more than 40 of my savings to purchase the annuity?
Yes.

38. What will happen to my savings if I decide to retire before age 60?
You will be required to use 80% of your savings in your Tier-I account to
purchase the annuity. You will be able to withdraw the balance 20% of your
savings as a lumpsum.

39. Will the annuity also provide a family (survivor) pension?
Yes. You will have an option of selecting an annuity which will pay a
survivor pension to your spouse.

40. What will happen to my savings if I decide to retire before age 60?
You will be required to use 80% of your savings in your Tier-I account to
purchase the annuity. You will be able to withdraw the balance 20% of your
savings as a lumpsum.

41. What will happen to my savings in the Tier-I account when I retire?
You will be able to withdraw 60% of your savings as a lumpsum when you
retire. You will be required to use the balance 40% of your savings to purchase
an annuity scheme from a life insurance company of your choice. The life
insurance company will pay you a monthly pension for the rest of your life.

42. What if I die or become permanently disabled during my service?
The Government is yet to issue any guidelines on this.

43. Will I have to pay any fees or charges under NPS?
You will have to pay a fee to the Central Recordkeeping Agency (CRA) which
will maintain your accounts and also to the PFM(s) which manage your savings.
These charges will be deducted from your savings on a periodic basis. The fees
and charges by the CRA and PFMs will be regulated by the PFRDA

.44. What will happen to my contributions to my Tier-I account?
Your monthly contributions, and  the matching contributions by the Government into
your Tier-I account, will be transferred by the Government in your name to a
Pension Fund Manager (PFM). The PFM will invest your contributions on your behalf.
In this way, your savings will earn an interest and grow over time.

SOURCE;CS NEWS

read more...

NEW PENSION SCHEME- FAQ

1. What is the New Pension System (NPS)?
   The NPS is a new contributory pension scheme introduced by the
Central Government for its own new employees. Under the new pension system, each
new central government employee will open a personal retirement account on
joining service. Every month, and till the employee retires or leaves government
service, a part of the employee's salary will be transferred into this account.
When the person retires, he will be able to use these savings to take care of
the needs and expenses of his family during old age.

2. Who is covered by the NPS?
 You are covered by the NPS if a.You joined central government service
on or after 01 January 2004, andb.You are an employee of a Central (Civil)
Ministry or Departments, orc.You are an employee of a non-civil Ministry or
Department including Railways, Posts, Telecommunication or Armed Forces (Civil),
ord.You are an employee of an Autonomous Body, Grant-in-Aid Institution, Union
Territory or any other undertaking whose employees are eligible to a pension
from the Consolidated Fund of India.

3. If I joined Central Government service on or after 01 January 2004 do I have an option of not being covered by the NPS?
 No. The NPS is mandatory for you

.4. I am covered by the NPS. Do the old Pension Rules apply to me?
No. The Central Civil Service Pension Rules (1972) do not apply to you. You are covered
only by the New Pension System Rules framed for the NPS

5. I am covered by the NPS. Can I contribute to the GPF?
No. The General Provident Fund (Central Service) Rules, 1960 also do not
apply to you. You will not be permitted to contribute towards GPF.

6. Am covered by the NPS. Am I eligible to Gratuity?
No. You will not be eligible to Gratuity.

7. How does the NPS work?
When you join Government service, you will be allotted a unique Personal
Pension Account Number (PPAN). This unique account number will remain the same
for the rest of your life. You will be able to use this account and this unique
PPAN from any location and also if you change your job. The PPAN will provide
you with two personal accounts:1. A mandatory Tier-I pension account, and2. A
voluntary Tier-II savings account.

8. What is the difference between Tier-I and Tier-II accounts?
1. Tier-I account: You will have to contribute 10% of your basic+DA+DP into
your Tier-I (pension) account on a mandatory basis every month. You will not be
allowed to withdraw your savings from this account till you retire at age 60.
Your monthly contributions and your savings in this account, subject to a
ceiling to be decided by the government, will be exempt from income tax. These
savings will only be taxed when you withdraw them at retirement.2. Tier-II
account: This is simply a voluntary savings facility for you. Your contributions
and savings in this account will not enjoy any tax advantages. But you will be
free to withdraw your savings from this account whenever you wish.

9. How will I contribute to my Tier-I (pension) account?
Every month, the government will deduct 10% of your salary (basic+DA+DP) and
automatically transfer this amount to your Tier-I account in your name.

10. Will the Government contribute anything to my Tier-I (pension) account?
Yes. As your employer, the Government will match your contribution (10% of
basic+DA+DP) and transfer this amount also to your Tier-I account in your name.


11. Can I contribute more than 10 into my Tier-I account?
Yes. You will be permitted to contribute more than the mandated 10% of
Basic+DA+DP into your Tier-I account – subject to any ceiling that may be
decided by the Government.

12. Will the Government also contribute more than 10 into my Tier-I account?
No. The contribution of the Government will be limited to 10% of your
basic+DA+DP.

13. What will happen if I am transferred to another city or country?
The PPAN number will stay the same and you will be able to use the same
accounts from anywhere in the world.

14. If I leave Government service before I retire will the Government
continue to contribute to my Tier-I account?

No. The 10% contribution by the Government will stop when you leave
Government service. However, your savings in your Tier-I and Tier-II accounts
will stay in your name and you will be able to continue using these accounts to
save for your retirement.

15. What if I die or become permanently disabled during my service?
 Pl.refer Office Memorandum: Additional Relief on death/disability of
Government servants covered by the NPS(New Pension Scheme) recruited on or after
1.1.2004 No.38/41/06/P&PW(A) Dated 5th May, 2009

16. Where will my savings be invested?
Each PFM will offer you a limited number of simple, standard schemes. You
will be free to choose any of the following schemes for investing your savings:
Scheme A This scheme will invest mainly in Government bondsScheme B This scheme
will invest mainly in corporate bonds and partly in equity and government bonds
Scheme C This scheme will invest mainly in equity and partly in government bonds
and corporate bonds.

17. I am covered by the NPS. Do the old Pension Rules apply to me?
No. The Central Civil Service Pension Rules (1972) do not apply to you. You
are covered only by the New Pension System Rules framed for the NPS.

18. I am covered by the NPS. Can I contribute to the GPF?
No. The General Provident Fund (Central Service) Rules, 1960 also do not
apply to you. You will not be permitted to contribute towards GPF.

19. Who will be responsible for the NPS and for protecting my interests?
The Government is setting up a new dedicated regulatory authority. This will
be named the Pension Fund Regulatory and Development Authority (PFRDA). The
PFRDA will be responsible for the NPS and for protecting your interests in the
NPS.

20. When will my contributions start?
Your contributions (and the matching contribution by the Government) towards
your Tier-I pension account will begin only from the month following the month
in which you join Government service. During the first month of your service,
you will be allotted the PPAN.(PRAN)

21. Who in the Government will issue me a PPAN open my accounts and be
responsible for the deductions?
When you join service, your Drawing and Disbursement Officer (DDO) will
instruct you to fill out a NPS form. You will be required to provide your full
professional and personal details including details of your nominee in this
form. The DDO will issue you the PPAN number(PRAN) and will also be responsible
for all administrative matters related to your NPS accounts including deduction
of your contributions, transferring your contributions and the matching
contribution of the Government to your Tier-I pension account.

22. What will happen to my contributions to my Tier-I account?
Your monthly contributions, and the matching contributions by the Government
into your Tier-I account, will be transferred by the Government in your name to
a Pension Fund Manager (PFM). The PFM will invest your contributions on your
behalf. In this way, your savings will earn an interest and grow over time.

23. Which agency will serve as a PFM?
The PFRDA will appoint a limited number of leading professional firms to act
as PFMs. One of these PFMs will be a public sector agency.

24. Who will decide which PFM manages my contributions and savings?
You will select a PFM to manage your contributions and savings.

25. Will I be permitted to select more than one PFM to manage my savings?
Yes. If you wish, you will be able to spread your savings across multiple
PFMs – where a part of your savings are managed by 2 or more PFMs.

26. Will I be permitted to change my PFM preference?
Yes. If you wish, you will be free to change the PFM and move all your
savings to another PFM of your choice.

27. Where will my savings be invested?
Each PFM will offer you a limited number of simple, standard schemes. You
will be free to choose any of the following schemes for investing your savings:
Scheme A This scheme will invest mainly in Government bondsScheme B This scheme
will invest mainly in corporate bonds and partly in equity and government bonds
Scheme C This scheme will invest mainly in equity and partly in government bonds
and corporate bonds

28. Will I be able to select more than one scheme?
Yes. You will be free to spread your savings across these three schemes.
Whenever you decide, you will also be free to switch your savings from one
scheme to another.

29. How will my contributions be transferred to the PFM and scheme selected
by me?
You will specify the PFM and scheme to your DDO. The DDO will arrange for
transfer of your contributions to the PFM(s) and scheme(s) that you have
selected.

30. What rate of return will my contributions earn?
Your contributions will not earn any specified rate of return. The PFM will
invest your savings in a scheme of your choice.The returns earned by the PFM on
the scheme selected by you will be credited to your account.

31. Will I have to pay any fees or charges under NPS?
You will have to pay a fee to the Central Recordkeeping Agency (CRA) which
will maintain your accounts and also to the PFM(s) which manage your savings.
These charges will be deducted from your savings on a periodic basis. The fees
and charges by the CRA and PFMs will be regulated by the PFRDA.

32. Can I contribute more than the 10 of basic+DA+DP into my TierI account at
the moment?
No. You will be allowed to do so only when the PFRDA, CRA and PFMs are
appointed.

33. What will happen to my contributions and earnings in my Tier-I account
when the PFRDA CRA and PFMs etc. are appointed?
Your full contributions, matching contributions by the Government, and the
interest earned on the same will be transferred in your name to the PFM and
scheme selected by you.

34. Will I have the option of continuing with the current 8 percent rate of
return?
No. Once your savings are transferred to the PFM, your savings will enjoy
only the rate of return earned by the PFM on scheme you have selected.

35. When will I be permitted to withdraw from my Tier-I account?
You will be able to withdraw your savings in your Tier-I account at age 60.

36. What will happen to my savings in the Tier-I account when I retire?
You will be able to withdraw 60% of your savings as a lumpsum when you
retire. You will be required to use the balance 40% of your savings to purchase
an annuity scheme from a life insurance company of your choice. The life
insurance company will pay you a monthly pension for the rest of your life.

37. Can I use more than 40 of my savings to purchase the annuity?
Yes.

38. What will happen to my savings if I decide to retire before age 60?
You will be required to use 80% of your savings in your Tier-I account to
purchase the annuity. You will be able to withdraw the balance 20% of your
savings as a lumpsum.

39. Will the annuity also provide a family (survivor) pension?
Yes. You will have an option of selecting an annuity which will pay a
survivor pension to your spouse.

40. What will happen to my savings if I decide to retire before age 60?
You will be required to use 80% of your savings in your Tier-I account to
purchase the annuity. You will be able to withdraw the balance 20% of your
savings as a lumpsum.

41. What will happen to my savings in the Tier-I account when I retire?
You will be able to withdraw 60% of your savings as a lumpsum when you
retire. You will be required to use the balance 40% of your savings to purchase
an annuity scheme from a life insurance company of your choice. The life
insurance company will pay you a monthly pension for the rest of your life.

42. What if I die or become permanently disabled during my service?
The Government is yet to issue any guidelines on this.

43. Will I have to pay any fees or charges under NPS?
You will have to pay a fee to the Central Recordkeeping Agency (CRA) which
will maintain your accounts and also to the PFM(s) which manage your savings.
These charges will be deducted from your savings on a periodic basis. The fees
and charges by the CRA and PFMs will be regulated by the PFRDA

.44. What will happen to my contributions to my Tier-I account?
Your monthly contributions, and  the matching contributions by the Government into
your Tier-I account, will be transferred by the Government in your name to a
Pension Fund Manager (PFM). The PFM will invest your contributions on your behalf.
In this way, your savings will earn an interest and grow over time.

SOURCE;CS NEWS

read more...

Clarification regarding deduction in respect of contribution to pension scheme

   F.No. 275/192/2009-IT (B)
New Delhi
Dated the 9th February, 2010.

Sub: Clarification regarding deduction in respect of contribution to pension scheme under Section 80 CCD – matter reg.

                                                                         ------

 1.   A number of representations have been received regarding deduction under Section
80 CCD for contribution made under pension scheme in the light of Circular No-1
/2010 dated 11th Jan’2010 issued on the subject of Deduction of Tax at Source
etc. It is clarified that in accordance with the provisions of Section 80 CCD,
deduction in respect of contribution made by an individual in the previous year
to his account under a pension scheme notified, is allowed in computation of his
total income –


(a) in the case of an employee, ten per cent of his salary in the previous year; and

(b) in any other case, ten per cent of his gross total income in the previous year.


2.   It is further clarified that where the Central Government or any other
employer makes any contribution to the account of employee for the pension
scheme, the assessee shall also be allowed a deduction in the computation of his
total income of the whole of the amount contributed by the Central Govt. or any
other employer as does not exceed 10% of his salary in the previous year.

3.  Salary for the purpose of above section (80 CCD) includes dearness allowance
if the terms of employment so provide, but excludes all other allowances and
perquisites.

4.  It is further clarified that aggregate limit of deduction under this section
(80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one
lakh.


Yours faithfully,

(Ansuman Pattnaik)
Director (Budget)

SOURCE - CGSN

read more...

Clarification regarding deduction in respect of contribution to pension scheme

   F.No. 275/192/2009-IT (B)
New Delhi
Dated the 9th February, 2010.

Sub: Clarification regarding deduction in respect of contribution to pension scheme under Section 80 CCD – matter reg.

                                                                         ------

 1.   A number of representations have been received regarding deduction under Section
80 CCD for contribution made under pension scheme in the light of Circular No-1
/2010 dated 11th Jan’2010 issued on the subject of Deduction of Tax at Source
etc. It is clarified that in accordance with the provisions of Section 80 CCD,
deduction in respect of contribution made by an individual in the previous year
to his account under a pension scheme notified, is allowed in computation of his
total income –


(a) in the case of an employee, ten per cent of his salary in the previous year; and

(b) in any other case, ten per cent of his gross total income in the previous year.


2.   It is further clarified that where the Central Government or any other
employer makes any contribution to the account of employee for the pension
scheme, the assessee shall also be allowed a deduction in the computation of his
total income of the whole of the amount contributed by the Central Govt. or any
other employer as does not exceed 10% of his salary in the previous year.

3.  Salary for the purpose of above section (80 CCD) includes dearness allowance
if the terms of employment so provide, but excludes all other allowances and
perquisites.

4.  It is further clarified that aggregate limit of deduction under this section
(80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one
lakh.


Yours faithfully,

(Ansuman Pattnaik)
Director (Budget)

SOURCE - CGSN

read more...

New Pension System courts old Rs 1-lakh limit

   This year, we've got a new tax-saving vehicle to get the Rs 1 lakh tax
deduction. After many near misses, the Pension Fund Regulatory and Development
Authority (PFRDA) launched the much-awaited New Pension System (NPS) in May
2008.

    Its tier I account can build you a snug retirement nest egg, even if you work
for the unorganised sector or are self-employed. It invests your money partly in
index funds, has the lowest-cost structure in the market-linked space and has a
lock-in up to 60 years of age —— making it an effective retirement vehicle.
However, it's still no match for our age-old trusted retirement vehicles,
Employees Provident Fund (EPF) and Public Provident Fund (PPF).


What is NPS?

It is a pure defined contribution product, which has a lock-in till 60 years of
age. You can begin with a minimum annual contribution of Rs 6,000.

There are two investment strategies available to you.


Active choice:
You can allocate your funds across three fund options: equity
(under which you can invest up to 50% in equity index funds), fixed income
instruments other than government securities and government securities.

Auto choice: Under this your fund allocation is linked to your age. Till 35
years of age, you get 50% exposure to equity, which tapers off to 10% by age 55.

The six fund managers you can choose from are ICICI Prudential Pension Fund
Management Co. Ltd, IDFC Pension Fund Management Co. Ltd, Kotak Mahindra Pension
Fund Ltd, Reliance Capital Pension Fund Ltd, SBI Pension Funds Pvt Ltd and UTI
Retirement Solutions Ltd.

While it is too early to judge the performance of the fund managers, a huge
variation is not expected since the funds will primarily invest in debt
instruments and the equity component will be restricted to index funds.

On maturity, you get 60% of the fund value as lump sum. The remaining goes into
buying an annuity to ensure regular pension. NPS discourages early withdrawal.
If you do so, you get only 20% as lump sum and the rest is annuitised.



How does it work ?

    There are designated points of presence (PoP) that can distribute NPS. Currently
there are 22 points of presence. Some of the popular ones are State Bank of
India, Central Bank of India, ICICI Bank, Axis Bank, Citibank, Union Bank of
India and IDBI Bank.

   To open an account, go to one of PoP branches, fill up a form, give your fund
preference and make your deposit. This PoP will then send your details to the
central record keeping agency (CRA), which will issue you a Permanent Retirement
Account Number (Pran). This number is unique to your account and is portable
across jobs and locations. You would also be given a telephone and Internet
password for fund transfer.

    Once this card is issued, the PoP sends the funds to the trustee bank. To make
subsequent payments, you would just need your Pran, which can be used at any
designated PoP.

   Says Rani S. Nair, executive director, PFRDA: "An investor can make
contributions in any of the designated branches. However, to make changes in,
say, address or fund preference, the customer will have to go to the original
branch. In case of a grievance, the customer can approach the CRA and
subsequently the PFRDA."


What are the costs?

NPS has two sets of charges-flat and variable. You would need to pay about Rs
470 as flat charges every year, but this is expected to come down as volumes go
up. The annual variable charges are custodian and fund management
charges-0.0075% (of the fund value) and 0.0009%, respectively. The fund
management charges are the lowest in the industry.


 
What's the tax treatment?

    There's no upper limit on the amount that you invest but only 10% of your income
is applicable for tax deduction under section 80CCD. However, the deduction
would be available subject to a maximum of Rs 1 lakh under section 80C. On
maturity, the 60% that you get as lump sum is taxable. The remaining 40% that
goes into buying annuity is exempt, but the pension money you would get would be
taxable as income in your hands.


What to do?
    In its current form, NPS is at a slight disadvantage as compared to other
products in the retirement stable. NPS has been given the EET (exempt, exempt,
tax) tax status. This means that while your investment is exempt at the time of
contribution and at the time of accumulation, it would be taxable at the time of
withdrawal.

    It is at this point that it loses out to EPF and PPF, which enjoy the EEE
(exempt, exempt exempt) tax status. Also, in EPF and PPF, the returns manages to
beat mutual fund are guaranteed. But despite the tax shortcoming, NPS pension
pension plans and most unit-linked pension plans (ULPP). While ULPPs have EEE
status, pension plans by mutual funds are taxed for capital gains.


    Pune-based financial planner Veer Sardesai says: "NPS invests your money in an
index fund which takes away the risk linked to the performance of the fund
manager. However they take a beating in terms of the tax treatment on the
maturity amount."

    "For effective retirement planning," says Sardesai, "one should exhaust his
section 80C with EPF and PPF. If there is still scope, go for NPS instead of MF
or insurance pension plans. Beyond 80C, one should look at index funds."

    However, if you are not an aggressive investor, then you could look at NPS since
it works like a balanced fund. But, once again, do this only after you have
exhausted your EPF and PPF benefits.

    Also, under the proposed tax regime, direct taxes code, all pension plans will
move to EET, making NPS the most cost-effective market-linked pension plan. For
now, maximise your EPF and PPF for 80C before you turn to NPS.

SOURCE - HINDUSTAN TIMES

read more...

New Pension System courts old Rs 1-lakh limit

   This year, we've got a new tax-saving vehicle to get the Rs 1 lakh tax
deduction. After many near misses, the Pension Fund Regulatory and Development
Authority (PFRDA) launched the much-awaited New Pension System (NPS) in May
2008.

    Its tier I account can build you a snug retirement nest egg, even if you work
for the unorganised sector or are self-employed. It invests your money partly in
index funds, has the lowest-cost structure in the market-linked space and has a
lock-in up to 60 years of age —— making it an effective retirement vehicle.
However, it's still no match for our age-old trusted retirement vehicles,
Employees Provident Fund (EPF) and Public Provident Fund (PPF).


What is NPS?

It is a pure defined contribution product, which has a lock-in till 60 years of
age. You can begin with a minimum annual contribution of Rs 6,000.

There are two investment strategies available to you.


Active choice:
You can allocate your funds across three fund options: equity
(under which you can invest up to 50% in equity index funds), fixed income
instruments other than government securities and government securities.

Auto choice: Under this your fund allocation is linked to your age. Till 35
years of age, you get 50% exposure to equity, which tapers off to 10% by age 55.

The six fund managers you can choose from are ICICI Prudential Pension Fund
Management Co. Ltd, IDFC Pension Fund Management Co. Ltd, Kotak Mahindra Pension
Fund Ltd, Reliance Capital Pension Fund Ltd, SBI Pension Funds Pvt Ltd and UTI
Retirement Solutions Ltd.

While it is too early to judge the performance of the fund managers, a huge
variation is not expected since the funds will primarily invest in debt
instruments and the equity component will be restricted to index funds.

On maturity, you get 60% of the fund value as lump sum. The remaining goes into
buying an annuity to ensure regular pension. NPS discourages early withdrawal.
If you do so, you get only 20% as lump sum and the rest is annuitised.



How does it work ?

    There are designated points of presence (PoP) that can distribute NPS. Currently
there are 22 points of presence. Some of the popular ones are State Bank of
India, Central Bank of India, ICICI Bank, Axis Bank, Citibank, Union Bank of
India and IDBI Bank.

   To open an account, go to one of PoP branches, fill up a form, give your fund
preference and make your deposit. This PoP will then send your details to the
central record keeping agency (CRA), which will issue you a Permanent Retirement
Account Number (Pran). This number is unique to your account and is portable
across jobs and locations. You would also be given a telephone and Internet
password for fund transfer.

    Once this card is issued, the PoP sends the funds to the trustee bank. To make
subsequent payments, you would just need your Pran, which can be used at any
designated PoP.

   Says Rani S. Nair, executive director, PFRDA: "An investor can make
contributions in any of the designated branches. However, to make changes in,
say, address or fund preference, the customer will have to go to the original
branch. In case of a grievance, the customer can approach the CRA and
subsequently the PFRDA."


What are the costs?

NPS has two sets of charges-flat and variable. You would need to pay about Rs
470 as flat charges every year, but this is expected to come down as volumes go
up. The annual variable charges are custodian and fund management
charges-0.0075% (of the fund value) and 0.0009%, respectively. The fund
management charges are the lowest in the industry.


 
What's the tax treatment?

    There's no upper limit on the amount that you invest but only 10% of your income
is applicable for tax deduction under section 80CCD. However, the deduction
would be available subject to a maximum of Rs 1 lakh under section 80C. On
maturity, the 60% that you get as lump sum is taxable. The remaining 40% that
goes into buying annuity is exempt, but the pension money you would get would be
taxable as income in your hands.


What to do?
    In its current form, NPS is at a slight disadvantage as compared to other
products in the retirement stable. NPS has been given the EET (exempt, exempt,
tax) tax status. This means that while your investment is exempt at the time of
contribution and at the time of accumulation, it would be taxable at the time of
withdrawal.

    It is at this point that it loses out to EPF and PPF, which enjoy the EEE
(exempt, exempt exempt) tax status. Also, in EPF and PPF, the returns manages to
beat mutual fund are guaranteed. But despite the tax shortcoming, NPS pension
pension plans and most unit-linked pension plans (ULPP). While ULPPs have EEE
status, pension plans by mutual funds are taxed for capital gains.


    Pune-based financial planner Veer Sardesai says: "NPS invests your money in an
index fund which takes away the risk linked to the performance of the fund
manager. However they take a beating in terms of the tax treatment on the
maturity amount."

    "For effective retirement planning," says Sardesai, "one should exhaust his
section 80C with EPF and PPF. If there is still scope, go for NPS instead of MF
or insurance pension plans. Beyond 80C, one should look at index funds."

    However, if you are not an aggressive investor, then you could look at NPS since
it works like a balanced fund. But, once again, do this only after you have
exhausted your EPF and PPF benefits.

    Also, under the proposed tax regime, direct taxes code, all pension plans will
move to EET, making NPS the most cost-effective market-linked pension plan. For
now, maximise your EPF and PPF for 80C before you turn to NPS.

SOURCE - HINDUSTAN TIMES

read more...

Department of posts to distribute new pension system

   The Department of Posts, Government of India, has been enlisted
as a Point of Presence (PoP) for distribution of the New Pension System (NPS) by
Pension Fund Regulatory & Development Authority (PFRDA). The Department of Posts
(DOP) would, to start with, make the NPS available at over 800 of its branches
all over the country, and expand the distribution network to more branches in a
phased manner in its endeavour to make NPS available to all citizens in all
parts of the country. Both PFRDA and the Department of Posts see significant
potential and synergy in this partnership for the development of the NPS and
believe that it will significantly further and promote the Government’s
initiative to provide old age income security to all citizens of India.

   NPS is currently being distributed by 21 entities through nearly
800 branches spread all over the country. PFRDA is working with these
institutions to bring all their branches under NPS in a time-bound manner. NPS
will now be sold through over 1600 outlets of DOP and other entities.

   PFRDA is also considering proposals from other entities seeking
authorization to act as a PoP. PFRDA has accorded over-riding priority to
expansion of NPS distribution network in its effort to make NPS available within
the easy reach of all citizens.

  SOURCE - PIB

read more...

Department of posts to distribute new pension system

   The Department of Posts, Government of India, has been enlisted
as a Point of Presence (PoP) for distribution of the New Pension System (NPS) by
Pension Fund Regulatory & Development Authority (PFRDA). The Department of Posts
(DOP) would, to start with, make the NPS available at over 800 of its branches
all over the country, and expand the distribution network to more branches in a
phased manner in its endeavour to make NPS available to all citizens in all
parts of the country. Both PFRDA and the Department of Posts see significant
potential and synergy in this partnership for the development of the NPS and
believe that it will significantly further and promote the Government’s
initiative to provide old age income security to all citizens of India.

   NPS is currently being distributed by 21 entities through nearly
800 branches spread all over the country. PFRDA is working with these
institutions to bring all their branches under NPS in a time-bound manner. NPS
will now be sold through over 1600 outlets of DOP and other entities.

   PFRDA is also considering proposals from other entities seeking
authorization to act as a PoP. PFRDA has accorded over-riding priority to
expansion of NPS distribution network in its effort to make NPS available within
the easy reach of all citizens.

  SOURCE - PIB

read more...

NTPC, DVC may join the New Pension System

   On the heels of the state-owned Nalco joining the New Pension System, the
public sector power firms such as NTPC and Damodar Valley

    Corporation (DVC) have shown interest in moving their retirement funds to the
scheme.

    "NTPC and DVC have shown interest in joining the New Pension System (NPS). We
are holding talks with them," a senior Pension Fund Regulatory and Development
Authority (PFRDA) official told PTI today.

    The nation's largest power producer NTPC employees around 24,500 while DVC has
over 11,000 in its rolls.

    Recently, the interim regulator PFRDA wrote to the Department of Public
Enterprises to help the Central PSUs bring their employees into the NPS for
pension savings beyond the mandatory contributions at 24 per cent of the salary
to the Employees Provident Fund Organisation.

    "We expect more PSUs to put their retirement funds in the coming days into the
NPS," the official added.

    Initially, the NPS was launched for Central government employees joining service
from January 1, 2004, but from last May it was extended to all citizens.

    According to the information available on the PFRDA website, as many as 6,90,274
subscribers have joined the NPS till this January 2, which include 3,119 from
the unorganised sector.

Out of this , the maximum 5,64,705 subscribers are the Central Government
employees, apart from 1,20,517 state government employees.

The total corpus under these schemes is close to Rs 3,500 crore.

National Aluminium Company became the first public sector undertaking to move
its employees retirement funds to the New Pension System to contribute six per
cent of the basic pay into the NPS.



SOURCE - ECONOMIC TIMES

read more...

NTPC, DVC may join the New Pension System

   On the heels of the state-owned Nalco joining the New Pension System, the
public sector power firms such as NTPC and Damodar Valley

    Corporation (DVC) have shown interest in moving their retirement funds to the
scheme.

    "NTPC and DVC have shown interest in joining the New Pension System (NPS). We
are holding talks with them," a senior Pension Fund Regulatory and Development
Authority (PFRDA) official told PTI today.

    The nation's largest power producer NTPC employees around 24,500 while DVC has
over 11,000 in its rolls.

    Recently, the interim regulator PFRDA wrote to the Department of Public
Enterprises to help the Central PSUs bring their employees into the NPS for
pension savings beyond the mandatory contributions at 24 per cent of the salary
to the Employees Provident Fund Organisation.

    "We expect more PSUs to put their retirement funds in the coming days into the
NPS," the official added.

    Initially, the NPS was launched for Central government employees joining service
from January 1, 2004, but from last May it was extended to all citizens.

    According to the information available on the PFRDA website, as many as 6,90,274
subscribers have joined the NPS till this January 2, which include 3,119 from
the unorganised sector.

Out of this , the maximum 5,64,705 subscribers are the Central Government
employees, apart from 1,20,517 state government employees.

The total corpus under these schemes is close to Rs 3,500 crore.

National Aluminium Company became the first public sector undertaking to move
its employees retirement funds to the New Pension System to contribute six per
cent of the basic pay into the NPS.



SOURCE - ECONOMIC TIMES

read more...

More post offices and Banks to offer the New Pension Scheme (NPS)

    vestors will soon have more outlets, including post offices, to invest in the
new pension system (NPS). Unhappy with the existing distributors, the pension
fund regulator has signed up eight more service providers to extend the reach of
the scheme. The scheme was thrown open to all individuals in May last year, but
has so far managed to sign up only about 3,000 subscribers. Pension Fund
Regulatory and Development Authority (PFRDA) sees the distribution or the point
of presence (PoP) as the weak link.

    Department of posts, Bank of India, ICICI Securities, Muthoot Finance, Syndicate
Bank, UTI Technology Services Ltd, Yes Bank and Karur Vysya Bank have now joined
the NPS as PoPs. They are expected to add another 2,000 branches to the
880-branch network, where subscribers can open and operate their NPS "We have
just signed an agreement with these PoPs but they will be operational in another
two to three months," a senior PFRDA official said.

    With IT connectivity a pre-requisite for handling NPS customers, the new points
of presence require some time for identifying branches that can function as
service providers for the scheme. They are also integrating their systems with
that of National Securities Depository Ltd — the record-keeping agency of the
NPS, the official explained.

    The NPS was initially open to central government employees who joined service
after 1 April, 2004. It was subsequently extended to private individuals in May
2009.

The biggest attraction of the scheme is the low fund management fee it charges —
0.009% against nearly 2.25% charged by mutual funds. It charges a fixed annual
account maintenance fee of Rs 350 and an additional Rs 20 per transaction. The
scheme has three plans with different exposure to equities.


    In the first eight months of its operations, the scheme is giving 10-12 %
returns , depending on the plan chosen by the subscriber.

SOURCE - ECONOMIC TIMES

read more...

More post offices and Banks to offer the New Pension Scheme (NPS)

    vestors will soon have more outlets, including post offices, to invest in the
new pension system (NPS). Unhappy with the existing distributors, the pension
fund regulator has signed up eight more service providers to extend the reach of
the scheme. The scheme was thrown open to all individuals in May last year, but
has so far managed to sign up only about 3,000 subscribers. Pension Fund
Regulatory and Development Authority (PFRDA) sees the distribution or the point
of presence (PoP) as the weak link.

    Department of posts, Bank of India, ICICI Securities, Muthoot Finance, Syndicate
Bank, UTI Technology Services Ltd, Yes Bank and Karur Vysya Bank have now joined
the NPS as PoPs. They are expected to add another 2,000 branches to the
880-branch network, where subscribers can open and operate their NPS "We have
just signed an agreement with these PoPs but they will be operational in another
two to three months," a senior PFRDA official said.

    With IT connectivity a pre-requisite for handling NPS customers, the new points
of presence require some time for identifying branches that can function as
service providers for the scheme. They are also integrating their systems with
that of National Securities Depository Ltd — the record-keeping agency of the
NPS, the official explained.

    The NPS was initially open to central government employees who joined service
after 1 April, 2004. It was subsequently extended to private individuals in May
2009.

The biggest attraction of the scheme is the low fund management fee it charges —
0.009% against nearly 2.25% charged by mutual funds. It charges a fixed annual
account maintenance fee of Rs 350 and an additional Rs 20 per transaction. The
scheme has three plans with different exposure to equities.


    In the first eight months of its operations, the scheme is giving 10-12 %
returns , depending on the plan chosen by the subscriber.

SOURCE - ECONOMIC TIMES

read more...

New Pension Scheme - PFRDA may raise allocations for pension fund managers

The Pension Fund Regulatory Development Authority (PFRDA) is likely to
allocate Rs 4,100 crore in 2010-11 among the three pension managers, State Bank
of India, UTI Mutual Fund and LIC Mutual Fund. Last year, the regulator had
allocated Rs 3,700 crore.





The corpus would mainly be the contribution of central and state government
employees. At present, 25 states have signed up for the new pension scheme
(NPS).



The NPS’ board of trustees decided to review the allocation formula. The
allocations will be decided on the basis of the managers’ performance over the
past year. According to PFRDA’s website, SBI’s pension fund had the highest net
asset value (NAV) under central government schemes. As on April 23, SBI pension
fund had an NAV of Rs 12.82 for central government employees, while UTI
Retirement Solutions posted an NAV of Rs 12.38. LIC Pension Fund’s NAV was Rs
12.41.





The final decision will be taken by the NPS’ board of trustees on Monday. Last
year, SBI had got 40 per cent, UTI MF 31 per cent and LIC MF 29 per cent.





PFRDA has also launched a small-ticket pension scheme called NPS Lite. This is
mainly aimed at helping self-help groups invest their money in NPS. Under NPS
Lite, the minimum annual investment limit is Rs 2,000, lower than the Rs 6,000
per annum for the unorganised sector. The annual record-keeping charges have
been brought down to Rs 65-70

source:business-standard.com

read more...

New Pension Scheme - PFRDA may raise allocations for pension fund managers

The Pension Fund Regulatory Development Authority (PFRDA) is likely to
allocate Rs 4,100 crore in 2010-11 among the three pension managers, State Bank
of India, UTI Mutual Fund and LIC Mutual Fund. Last year, the regulator had
allocated Rs 3,700 crore.





The corpus would mainly be the contribution of central and state government
employees. At present, 25 states have signed up for the new pension scheme
(NPS).



The NPS’ board of trustees decided to review the allocation formula. The
allocations will be decided on the basis of the managers’ performance over the
past year. According to PFRDA’s website, SBI’s pension fund had the highest net
asset value (NAV) under central government schemes. As on April 23, SBI pension
fund had an NAV of Rs 12.82 for central government employees, while UTI
Retirement Solutions posted an NAV of Rs 12.38. LIC Pension Fund’s NAV was Rs
12.41.





The final decision will be taken by the NPS’ board of trustees on Monday. Last
year, SBI had got 40 per cent, UTI MF 31 per cent and LIC MF 29 per cent.





PFRDA has also launched a small-ticket pension scheme called NPS Lite. This is
mainly aimed at helping self-help groups invest their money in NPS. Under NPS
Lite, the minimum annual investment limit is Rs 2,000, lower than the Rs 6,000
per annum for the unorganised sector. The annual record-keeping charges have
been brought down to Rs 65-70

source:business-standard.com

read more...