Last year on 1 May 2009, Central Government of India launched NEW PENSION SCHEME. Let's have a look
WHAT IT IS?
NPS is a clean & clear contribution plan regulated by Pension Fund Regulatory and Development Authority (PFRDA), it's give you a freedom to choose the fund option and manger.
TO WHOM?
All citizen of Indian whether Resident or Non- resident age between 18-55 years. Purpose behind NPS is to cover 90% manpower under social security scheme that doesn't have proper planning for their sunset year.
STRUCTURE OF NPS
NPS starts with Tier I account where minimum amount is Rs 6,000 with no partial withdrawal facility; however you may take Tier II account (optional) after 6 months to avail partial withdrawal facility. So over all NPS offers two accounts- TIER I and TIER II.
NPS INVESTMENT OPTIONS
NPS having three fund options
-Equity (E) WHAT IT IS?
NPS is a clean & clear contribution plan regulated by Pension Fund Regulatory and Development Authority (PFRDA), it's give you a freedom to choose the fund option and manger.
TO WHOM?
All citizen of Indian whether Resident or Non- resident age between 18-55 years. Purpose behind NPS is to cover 90% manpower under social security scheme that doesn't have proper planning for their sunset year.
STRUCTURE OF NPS
NPS starts with Tier I account where minimum amount is Rs 6,000 with no partial withdrawal facility; however you may take Tier II account (optional) after 6 months to avail partial withdrawal facility. So over all NPS offers two accounts- TIER I and TIER II.
NPS INVESTMENT OPTIONS
NPS having three fund options
-Fixed Income Instrument (C ) Invest upto max 100%
-Government Securities (G) Invest upto max 100%
Active Choice Invest upto max 50% of premium in E, or 100% in C or G.
Auto choice This is default choice, invest through lifecycle approach. Where till 35 yr age 50% in E and gradually reduces E to 10% by 55 yrs age.
HOW CAN I CHOOSE FUND MANAGER AND OPTION?
Ever years May month, you can switch your funds among 3 options and change fund management. As well as switch between auto choice and active choice.
At present you can choose following fund manager
-SBI Pension Fund HOW CAN I CHOOSE FUND MANAGER AND OPTION?
Ever years May month, you can switch your funds among 3 options and change fund management. As well as switch between auto choice and active choice.
At present you can choose following fund manager
-UTI Retirement Solutions
-Reliance capital pension fund
-IDFC Pension Fund Management
-Kotak Mahindra Pension Fund
-ICICI Prudential Fund Management
GETTING PENSION?
On 60 yr age, 60% of fund value (TAX FREE) you can withdraw or remain invested. However, you need to withdraw max 10% from fund value every year till 70 yr of age. Any balance left paid after 70 yr of age Next 40% fund investor need to buy annuity plan from insurance company.
INVESTMENT WINDOWS
PFRDA has appointed 22 distributors;
On 60 yr age, 60% of fund value (TAX FREE) you can withdraw or remain invested. However, you need to withdraw max 10% from fund value every year till 70 yr of age. Any balance left paid after 70 yr of age Next 40% fund investor need to buy annuity plan from insurance company.
INVESTMENT WINDOWS
PFRDA has appointed 22 distributors;
-STATE BANK OF INDIA
-CENTRAL BANK OF INDIA
-ICICI BANK
-AXIS BANK
-CITIBANK
-UNION BANK
-IDBI BANK
Last but not least
50/- from fund value for issuing PRAN (single time)
40/- registration charges and contribution upload
20/- if any subsequent transaction
350/- annual maintenance charges
10/- for every transaction from the fund value
(these charges goes down to Rs 280 and Rs 6 once corpus touches Rs 10 lakh)
0.0075% to 0.05% custodian charges p.a. from fund value
0.0009% Fund Management Charges p.a.
Shakti Shukla
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