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New Pension System

New Pension System (NPS) – South Indian Bank  acts as  Point Of Presence (POP)

New Pension System (NPS) has been launched across the country with effect from 1st May 2009, by Pension Fund Regulatory and Development Authority (PFRDA). South Indian Bank (SIB) has been appointed by PFRDA to act as one of the Point of Presence (POP) Banks in the country. In fact, SIB is the single old generation private sector bank that has been permitted by PFRDA among other POPs. SIB has identified 750 designated branches across the nation to act as the Point Of Presence Service Provider (POP-SP).

From 2004-05 onwards all State and Central Government employees are coming under this Contributory Pension Scheme- NPS. The same scheme is made available to any citizen of India from 1st May, 2009.

NPS is available in three distinct models:

1. All Citizens Model  - Available to all citizens of India (Age: 18years to 60years), including NRIs.

2. Corporate Model - Any corporate entity can opt for this model to disburse the benefits of NPS to its employees.

3. NPS Lite -  Making pension possible for small investors - Available to all citizens of India (Age: 18years to 60years) belonging to unorganized sector.

  1. General Features & Attributes 
  2. Benefits 
  3. Downloads 
  4. Documents Required

 All Citizens Model

NPS offers two types of accounts:

Tier-I account: Contribution of savings to a non-withdrawable pension account upto the age of 60 years.
Tier-II account: This is a voluntary savings facility. Subscriber is free to withdraw savings from this account. Tier I account is mandatory to open a Tier II account.

Who can join?

Any citizen of India, whether Resident or Non-Resident, other than Central & State Government employees, subject to the following conditions:

  • Age band is between 18 – 60 years as on the date of submission of his/her application to our bank. 
  • Customer should comply with the Know Your Customer (KYC) norms.

How much a subscriber needs to contribute?

 
Particulars
NPS
Tier I
Tier II
Minimum Contribution to open A/c (Rs.)
500/-
1000/-
Minimum Contribution in a Financial Year Excluding Bank Charges (Rs.)
6000/-
250/-
Minimum Account balance for a Financial Year (Rs.)
NA*
Units worth Rs.2000/-

*Tier I- Non-withdrawable account.

How to subscribe?

Submit the Subscriber registration Form with KYC documents (as mentioned in the Form) and the NPS Contribution Instruction Slip (NCIS) and minimum contribution amount to any of our designated branch.
For more details on the NPS account, write to us as at npsproject@sib.co.in.

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Corporate Model

In pursuance to PFRDA’s commitment to make available an avenue for saving for old age to all sections of society, PFRDA has now launched a separate model to provide NPS to the employees of corporate entities, including PSUs. This model is titled “NPS – Corporate Sector Model”.

How can Corporate join NPS?

The scheme features are common as in All Citizen Model. The differentiating features are as listed below:-

  1. Corporate may join NPS through MOUs with any one of our existing designated branch
  2. The employees will come under NPS within the purview of employer-employee relationship. 
  3. Corporates can co-contribute for employees’ pension, and select or switch Pension Fund Managers for its employees. However, this is optional and the corporate may decide not to co-contribute if it desires to. 
  4. Employer can claim tax benefit for the amount contributed towards pension of employees’ upto 10% of salary (Basic+DA) under ‘Business Expense’. 
  5. Employee’s contribution is eligible for tax exemption as per the Income Tax Act, 1961. 
  6. Under the Corporate plan, registered employees (subscriber) get individual PRAN, portability across employment, sector and geography.

Documentation

Corporate would need to sign MOU with any of our authorized branches, submit Corporate Registration Form CHO-I

Corporate Subscriber Registration Form (CS-S1) along with KYC and registration and contribution amount and the NPS Contribution Instruction Slip.

After Corporate Registration, the subscribers can submit Corporate Subscriber Registration Form CS-S1. No initial contribution is to be submitted by subscribers under the Corporate plan.

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NPS Lite Model

NPS- Lite is a pension product designed by government specifically for marginal investors to promote small savings during their productive life. It aims at building up a corpus sufficient enough to buy an annuity for their old age. "NPS-Lite Model" is designed to ensure ultra-low administrative and transactional costs, so as to make such small investments viable. NPS-Lite works on a "group" model. It also aims at harnessing the outreach and capacity of the Government operated schemes, NGOs, MFIs, NBFCs etc. in targeting and servicing the old age savings needs of low income workers.

South Indian Bank is designated by PFRDA as an “Aggregator” in NPS Lite model & will be responsible for grass-root level enrolments, ongoing collection, re-conciliation and transfer of individual contributions as well as for ongoing services and information delivery.

How to subscribe?

Submit the Subscriber registration Form with KYC documents (as mentioned in the Form) and the NPS Contribution Instruction Slip (NCIS) and minimum contribution amount to any of our designated branch.
For more details on the NPS account, write to us as at npsproject@sib.co.in.

 How much a subscriber needs to contribute?

The subscriber should make the first contribution at the time of registration subject to following condition:

  • 1. Minimum sum amount of contribution during Registration Rs. 100/-
  • 2. Subscribers must contribute a minimum of Rs 1000/- in order to avail Swavalamban Benefit from Government of India.

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General Features & Attributes


Key Features

Key Features

1. It is a pension scheme for non-government employees or individual.
2. This is open to anyone who are between 18-60 years of age including NRIs
3. There is no limit on maximum contribution.
4. Subscriber has the option to choose auto or manual choice for distribution of his contributions.
5. Investor can make the contributions till 60 years.
6. Pension will start at the age of 60.
7. Tax benefit under section 80C for the investments.

Attributes

1. Pension Fund Managers Available

NPS offers the subscriber to choose and switch between the following Pension Fund Managers:

  • ICICI Prudential Pension Funds Management Company Limited
  • Kotak Mahindra Pension Fund Limited 
  • Reliance Capital Pension Fund Limited 
  • SBI Pension Funds Private Limited 
  • UTI Retirement Solutions Limited

2. Investment Options Available

Active choice - Individual Funds (Asset Class E, Asset Class C, and Asset Class G)
Subscriber has the option to actively decide as to how their NPS pension wealth is to be invested in the options disclosed below:

Asset Class E - Investments in predominantly equity market instruments
Asset Class C- Investments in fixed income instruments (corporate bonds) other than Government securities.

Asset Class G - Investments in Government securities

Age
Asset Class E
Asset Class C
Asset Class G
 
 
 
 
Up to 35 years
50%
30%
20%
 
 
 
 
36 years
48%
29%
23%
 
 
 
 
37 years
46%
28%
26%
 
 
 
 
38 years
44%
27%
29%
 
 
 
 
39 years
42%
26%
32%
 
 
 
 
40 years
40%
25%
35%
 
 
 
 
41 years
38%
24%
38%
 
 
 
 
42 years
36%
23%
41%
 
 
 
 
43 years
34%
22%
44%
 
 
 
 
44 years
32%
21%
47%
 
 
 
 
45 years
30%
20%
50%
 
 
 
 
46 years
28%
19%
53%
 
 
 
 
47 years
26%
18%
56%
 
 
 
 
48 years
24%
17%
59%
 
 
 
 
49 years
22%
16%
62%
 
 
 
 
50 years
20%
15%
65%
 
 
 
 
51 years
18%
14%
68%
 
 
 
 
52 years
16%
13%
71%
 
 
 
 
53 years
14%
12%
74%
 
 
 
 
54 years
12%
11%
77%
 
 
 
 
55 years
10%
10%
80%
 
 
 
 


Criteria for Active Choice

(a) Subscriber can choose to invest entire pension wealth in C or G asset classes and upto a maximum of 50% in equity (Asset class E).

(b) Subscriber can also distribute your pension wealth across E, C and G asset classes.

(c) Subscriber required to indicate their choice of Pension Fund manager (PFM) from among the six Pension Fund managers (PFMs) appointed by PFRDA.

Auto choice - Lifecycle Fund

In this option, the investments will be made in a life-cycle fund. Here, the portion of funds gets invested across three asset classes in a pre-defined fashion depending upon the age of the subscriber. The funds are churned on a yearly basis in the order of priority from E ->C -> G. At the lowest age of entry (18 years), the auto choice will entail investment of 50% of pension wealth in “E” Class, 30% in “C” Class and 20% in “G” Class. These ratios of investment will remain fixed for all contributions until the participant reaches the age of 36. From age 36 onwards, the weight in “E” and “C” asset class will decrease annually and the weight in “G” class will increase annually till it reaches 10% in “E”, 10% in “C” and 80% in “G” class at age 60 years.

3. Withdrawal Avenues

(1) At any point of time before 60 years of age

Subscriber is required to invest at least 80% of the pension wealth to purchase a life annuity from any IRDA – regulated life insurance company. Rest 20% of the pension wealth may be withdrawn as lump sum.

(2) On attaining the Age of 60 and upto 70 years of age

Subscriber is required to invest minimum 40 percent of accumulated savings (pension wealth) to purchase a life annuity from any IRDA-regulated life insurance company. Subscriber may choose to purchase an annuity for an amount greater than 40 percent. The remaining pension wealth can either be withdrawn in a lump sum on attaining the age of 60 or before the age of 70 years, at the option of the subscriber.

(3) Death due to any cause

Option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. However, if the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure

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Benefits

Its Voluntary: NPS is open to every Indian Citizen, Including NRI’s.

Its Flexible: One can choose his own Investment option & Pension Fund Manager.

Its Portable: One can operate the account from anywhere in the Country, even if you change your city, job or pension fund manager.

Its Regulated: NPS is regulated by PFRDA, with transparent investment norms, & regulated Monitoring & Performance review of Fund Managers by NPS trust.

PRAN: All subscribers of NPS would get a Central Government embossed Permanent Retirement Account Number (PRAN) Card

Swavalamban Yojna: Subscribers in the unorganized sector can utilize the benefits of “Swavalamban Yojna”.

As per Press Information Bureau, Govt. of India, Under the Swavalamban scheme, Government of India, will contribute Rs. 1000 per year to each NPS account opened in the year 2012-13 for the next 5 years, The benefit will be available only to persons who join the NPS with a minimum contribution of Rs. 1,000 and maximum contribution of Rs. 12,000 per annum.


Tax Benefits:

Those who are salaried employees may claim deduction under section 80 C upto Rs 1 lac for their own contributions towards NPS account. In addition to this, they are entitled to claim deductions under section 80 CCD for contributions made by their employer upto 10% of their salary. For this purpose salary construes as Basic salary plus dearness allowance. It is noteworthy that the deduction under section 80CCD can be claimed over and above the permissible deductions under section 80C.

However, those who are self-employed can avail deduction under section 80CCD upto 10% of their gross total income (which is comprised of income computed under different heads before reducing it by all other deductions available under section 80.) In addition to deductions under section 80CCD, self-employed people are also entitled to deductions under section 80C for other instruments eligible therein.

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Downloads

(1) PFRDA prescribed Forms

Request for Activation of Tier-II account under New Pension System (NPS)

Request for Change-of-POP

NPS Lite Normal Withdrawal Form

NPS Lite Premature Withdrawal Form

NPS Lite Withdrawal Form in death cases

NPS Normal Tier 1 Withdrawal Form

NPS Premature Withdrawal Form

NPS Scheme-Preference-Change

NPS Subscriber-details-change-l

NPS Withdrawal Form in death cases

Tier - II withdrawal form

Unfreezing of Frozen NPS Accounts

(2) Brochures

NPS  - English

NPS - Malayalam

NPS Lite

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 Documents Required

List of Acceptable KYCs for NPS/ NPS-Lite Applications

(Please note- For Tier – II applications a cancelled cheque leaf is mandatory.)

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