Statement of Transaction
Also written Statement of Transaction (SoT) · SOT
An annual NPS statement, sent physically or by email, that records a subscriber's contributions and account activity for the financial year.
In plain language
An NPS subscriber's account grows through contributions and market returns, month after month, without much day-to-day visibility. Once a year, the system sends a summary of everything that happened.
That summary is the Statement of Transaction. It is sent to every subscriber annually, either as a physical document or by email.
How it works
The SOT reports a subscriber's account activity for the financial year — it is what lets a subscriber check whether the Rs 1,000 minimum annual contribution needed to keep the account from going dormant has actually been met, alongside confirming that contributed amounts were credited as units on the usual T+2 basis.
Beyond the SOT, subscribers can also view their live NPS corpus through the Consolidated Account System (CAS), once they give the required consent to their CRA — a second, more current, channel to the same underlying information.
A worked example
Ms Chatterjee contributes to her NPS Tier I account through monthly D-Remit transfers of Rs 2,000. At the end of the financial year, her CRA sends her a Statement of Transaction by email, showing 12 contributions totalling Rs 24,000, the units credited against each one, and her account's closing value.
Reviewing the SOT, she confirms her contributions comfortably cleared the Rs 1,000-a-year minimum needed to keep her account active. A colleague who contributed only once, in a single Rs 500 instalment, would see from his own SOT that he had fallen short of the Rs 1,000 floor — a shortfall that, left unaddressed, leads to the account being marked dormant.
Why NISM asks about it
Chapter 4, in the coverage of contribution and account-servicing mechanics, introduces the SOT alongside the CAS as the two ways a subscriber can check their account. Expect a question distinguishing the SOT (an annual statement) from the CAS (an on-demand, consent-based live view).
Common exam traps
- The SOT is annual; the CAS view is available on demand, once consent is given — they are not the same channel.
- The SOT can be physical or emailed — a subscriber is not limited to one delivery mode.
- Checking the SOT is how a subscriber actually verifies they have met the Rs 1,000-a-year minimum contribution — it is not just a passive record.
Check yourself
1.What happens to the risk of the retirement corpus proving inadequate when a scheme moves from Defined Benefit to Defined Contribution?
- a)It moves from the employer to the employee, who assumes both longevity risk and investment risk
- b)It moves from the employee to the employer, who must make good any shortfall
- c)It is transferred to the pension fund manager under the scheme guidelines
- d)It is eliminated, because contributions are invested professionally
Show the answer
Answer: (a) It moves from the employer to the employee, who assumes both longevity risk and investment risk
⚠️ "In the DC model, THE RISK OF INADEQUACY of the retirement corpus to provide a pension through the life of the individual MOVES FROM THE EMPLOYER TO THE EMPLOYEE. The individual assumes BOTH THE LONGEVITY RISK (risk of outliving retirement assets) AND THE INVESTMENT RISK (risk of uncertainty in the returns from investments)."
This is the single most important consequence of the DB-to-DC shift, and it is why the chapter stresses that "DEFINED BENEFIT retirement plans PROTECTED the subscriber from the longevity risk. But in a DEFINED CONTRIBUTION plan THIS RISK IS ASSUMED BY THE SUBSCRIBER."
The risks are managed, not removed: by "doing a PERIODIC REVIEW of the corpus accumulated so far and making appropriate changes to the contributions made and the type of investments held" — using the Statement of Transaction as the key document.
2.In a defined contribution scheme, the subscriber bears the longevity and investment risk. Which document does the workbook name as the key document that lets the subscriber review the corpus and manage these risks?
- a)The pension fund's annual report to its regulator
- b)The PRAN card issued at registration
- c)The employer's Form 16
- d)The Statement of Transaction (SoT), which sets out the contributions received, the units allotted against each, the prevailing NAV and the resulting value of the corpus
Show the answer
Answer: (d) The Statement of Transaction (SoT), which sets out the contributions received, the units allotted against each, the prevailing NAV and the resulting value of the corpus
The workbook says that in the DC model the individual assumes both the longevity risk (risk of outliving retirement assets) and the investment risk (risk of uncertainty in the returns from investments). These risks can be managed by doing a periodic review of the corpus accumulated so far and making appropriate changes to the contributions made to the corpus and the type of investments held. The Statement of Transaction (SoT), issued by the DC scheme to every subscriber is the key document that enables this review. It sets out the contributions received during the period, the units allotted against each contribution, the prevailing Net Asset Value, and the resulting value of the corpus. So option D is correct.
The SoT lets the subscriber decide whether the contribution amount, asset allocation, or pension fund manager needs to be revised.
Why the others are wrong:
- Option A: a fund-level report does not show the subscriber's own contributions, units and corpus value.
- Option B: the PRAN card identifies the account. It says nothing about how the corpus is growing.
- Option C: Form 16 is a salary tax certificate. It is not a record of the retirement corpus.
The underlying shift: in the DC model, the risk of inadequacy of the retirement corpus to provide a pension through the life of the individual moves from the employer to the employee. Regular review is how the employee manages that risk.
Where this is taught
Free preparation for NISM Series XVIIRelated terms
- Business DayThe PFRDA-defined day on which the Trustee Bank's designated branch, the stock exchanges and the government securities market are all simultaneously open for business.
- Central Recordkeeping AgencyThe intermediary that holds every NPS subscriber record — it issues the PRAN, unitises contributions at scheme NAV and sits between the subscriber, the pension funds and the trustee bank.
- Dormant accountAn NPS account that goes dormant when the subscriber fails to contribute at least Rs 1,000 in a year, and is closed outright once its value falls to zero.
- Pension fundA managed vehicle that pools subscribers' contributions and invests them across equity, corporate bonds and government securities to build a retirement corpus — a registered intermediary under the PFRDA Act.