Corporate model
Also written NPS Corporate Model · Corporate Sector Model
The NPS model that lets companies and other registered entities offer their employees a pension benefit through the NPS architecture, funded by the employer, the employee, or both.
In plain language
A company that wants to give its employees a retirement benefit has a choice. It can build its own pension trust from scratch — expensive and complicated. Or it can plug into a system that already exists.
The Corporate Model is that second option. It lets a company extend the NPS to its employees without setting up and running its own retirement scheme.
How it works
The Corporate Model is open to entities registered under the Companies Act, various Cooperative Acts, Central and State Public Sector Enterprises, partnership firms, LLPs, proprietorships, trusts and societies. The contribution may come from the employer alone, the employee alone, or both in whatever proportion they decide. Subscription limits, investment options, charges and withdrawal rules otherwise mirror the All Citizen Model.
The choice of pension fund and asset allocation can be made either at the employer level, or the employer can hand that choice to employees. If the employer chooses first, employees get the right to make their own choice after one year. Tier I account charges may be borne by the corporate or the employee, at the corporate's discretion; Tier II charges are always borne by the employee.
2026 reclassification. Under PoP charge circulars dated 10 March 2026, the earlier single "Corporates" category was split into (i) Government Entities and (ii) Legal Entities (other than Government). Charges for the latter moved to the same AUM-based structure as the All Citizen Model — 0.20% per annum of assets under management — with PoPs free to recover or waive charges on their own employees. Where a corporate is itself a Central or State Government-owned body, its employees' exit is governed by the Government-sector exit rules, not the standard Corporate Model rules.
Employees can also transfer a recognised provident fund or superannuation fund balance into their NPS account; the transferred amount is not treated as income for the year and attracts no tax on transfer.
A worked example
Meridian Technologies Pvt Ltd, a private company, adopts the NPS Corporate Model for its 400 employees. The company contributes 10% of basic salary to each employee's NPS account, and employees may add a voluntary top-up. Meridian, as the corporate, chooses the pension fund and the equity/debt split at the outset.
After one year, employee Ms Fernandes exercises her own right to switch to a different registered pension fund and to change her asset allocation, since the one-year mark has passed. Under the March 2026 charge structure, because Meridian is a private (non-Government) Legal Entity, the applicable PoP charge on its employees' accounts is 0.20% per annum of AUM, the same structure as the All Citizen Model — Meridian, as the sponsoring corporate, decides whether to absorb this cost itself or pass it to employees.
Separately, an employee joining from another company transfers Rs 8 lakh from his previous employer's recognised provident fund into his new NPS account. That Rs 8 lakh is not treated as income for the year it is transferred, and no tax is payable on the transfer.
Why NISM asks about it
Chapter 4, section 4.1.2 (Models under the NPS), sets out the Corporate Model alongside the Government, All Citizen and Atal Pension Yojana models. Expect a question distinguishing which model applies to a given fact pattern, and the 2026 reclassification into Government Entities versus Legal Entities is a live, recently examinable change.
Common exam traps
- The employer can choose the pension fund and allocation, but employees regain their own choice after one year if the employer made the initial call — a frequently tested timeline.
- Tier I charges are flexible (corporate or employee); Tier II charges always fall on the employee.
- A Government-owned corporate body is still subject to Government-sector exit rules, even though it sits in the Corporate Model administratively — sector rules follow ownership, not the model label.
- Do not confuse the Corporate Model with a company's own superannuation fund — the two are separate retirement-benefit routes with different governance and tax treatment.
Check yourself
1.Mr Kulkarni, an NPS subscriber under the Corporate model, died without a valid NPS nomination. His employer's records hold a valid nomination in favour of his wife for his other terminal benefits. How is the NPS nominee determined?
- a)The corpus is transferred to the NPS Trust until a court decides
- b)His wife may log in with his credentials after his death and register a nomination
- c)The corpus is divided equally among all legal heirs, ignoring the employer's records
- d)The valid nomination in the employer's records for his other terminal benefits is used for the NPS too
Show the answer
Answer: (d) The valid nomination in the employer's records for his other terminal benefits is used for the NPS too
The workbook says: if a subscriber in the government or corporate sector dies without a valid nomination, any valid nomination existing in the records of the employer for the other terminal benefits will be used for the NPS too. So option D is correct.
Why the others are wrong:
- Option A describes a court-custody step that the workbook does not mention.
- Option B is expressly barred. Any change in the nomination after the death of the subscriber using their login credentials will be deemed invalid.
- Option C ignores the employer-nomination rule, which applies before any legal-heir process.
Other nomination rules: the application form provides for filling upto three nominations. If there is more than one nominee, then the percentage allocation to each has to be specified. If the total allocation does not add up to 100 percent, the nomination will be rejected. Nominating at registration is free. Later changes through the PoP cost a fee of Rs.20 for each service request, and eNomination is available through the subscriber's login.
2.In which of the following models of the NPS is the contribution ALWAYS solely by the subscriber?
- a)Government model
- b)State government model
- c)Corporate model
- d)All citizens model
Show the answer
Answer: (d) All citizens model
This is the workbook sample question, and the word "always" decides it.
In the All Citizen Model, the subscriber signs on DIRECTLY for this model and makes PERIODIC VOLUNTARY CONTRIBUTIONS. There is no employer anywhere in the picture, so the contribution can only come from the subscriber.
⚠️ The Corporate model is the trap. Contribution there may be made by THE EMPLOYER ALONE, EMPLOYEE ALONE, OR THE EMPLOYER AND EMPLOYEE IN ANY DECIDED PROPORTION — employee-only is possible, which is exactly why it fails a question asking for "always".
In the Government and State government models the employee contributes 10% of Basic + DA and the government 14% — never solely the subscriber.
3.Which of the following places the NPS milestones in the correct chronological order?
- a)All Citizen model in 2004 → Government model in 2009 → Atal Pension Yojana in 2011 → Corporate Sector model in 2015
- b)NPS for Central Government employees joining on or after 1 January 2004 → extension to all citizens in May 2009 → Corporate Sector model in 2011 → Atal Pension Yojana in 2015
- c)Corporate Sector model in 2004 → Government model in 2009 → All Citizen model in 2011 → Atal Pension Yojana in 2015
- d)Government model in 2004 → Atal Pension Yojana in 2009 → Corporate Sector model in 2011 → All Citizen model in 2015
Show the answer
Answer: (b) NPS for Central Government employees joining on or after 1 January 2004 → extension to all citizens in May 2009 → Corporate Sector model in 2011 → Atal Pension Yojana in 2015
The workbook's opening paragraph gives the sequence. NPS was launched by Govt of India for Central Government employees (excluding Armed Forces) joining services on or after January 1, 2004, was then adopted by various state governments, and in May 2009 was extended to all citizens of India on a voluntary basis. The NPS Corporate Sector model was launched in 2011, and the Atal Pension Yojana (APY) was launched in 2015 to provide a guaranteed pension cover to people in the unorganized sector. So option B is correct.
Why the others are wrong:
- Option A puts the All Citizen model first. It came five years after the Government model, and the Corporate model (2011) came before APY (2015), not after it.
- Option C starts with the Corporate model. That was the third step, in 2011, not the first.
- Option D puts APY in 2009 and the All Citizen model in 2015. Those two dates are reversed: 2009 is the all-citizens extension and 2015 is APY.
A related date to keep: the PFRDA was initially established in 2003 as an interim regulator and became the statutory Authority with the PFRDA Act 2013 and its notification on February 1, 2014.
Where this is taught
Free preparation for NISM Series XVIIRelated terms
- All Citizen ModelThe voluntary NPS model for Indian citizens, resident or non-resident, and OCI cardholders, in which the subscriber alone contributes, makes the choices and bears the Tier I and Tier II charges.
- National Pension SystemA PFRDA-regulated, defined-contribution retirement scheme in which the subscriber builds a market-linked corpus and must convert part of it into an annuity at exit; there is no guaranteed return.
- Government modelThe NPS model that mandatorily covers Central and State Government employees who joined on or after 1 January 2004, with a 10% employee and 14% government monthly contribution.
- Tier I accountThe mandatory NPS retirement account: restricted withdrawals, a 75% equity cap, tax benefits and compulsory annuity purchase with part of the corpus on exit.
- Tier II accountThe voluntary NPS investment account open only to holders of an active Tier I account, with no withdrawal restrictions, no mandatory annuity and, except for NPS-TTS, no tax benefit.
- Common SchemesThe pre-existing NPS Active Choice and Auto Choice (life-cycle) options, now given this collective label to set them apart from the newer, persona-targeted schemes launched under the Multiple Scheme Framework.