Foundation — What the NPS is, who runs it, and the models and accounts within it

The National Pension System — foundations

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1. The regulator and the scheme

"The PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (PFRDA) was initially established in 2003 AS AN INTERIM REGULATOR for NPS and subsequently with the passage of the PFRDA ACT 2013 and its notification on FEBRUARY 1, 2014, PFRDA has been established as THE STATUTORY AUTHORITY for regulating and developing the pension sector in India."

⚠️ Two dates, two different things: 2003 — interim regulator. 1 February 2014 — statutory authority under the PFRDA Act, 2013.

The timeline to memorise:

⚠️ The two age windows: "The AGE OF ENTRY AND EXIT INTO THE NPS IS 18-85 YEARS while that in APY IS FROM 18-40 YEARS and the individual has to be a NON-INCOME TAX PAYING individual."

1.1 The newer models

UNIFIED PENSION SCHEME (UPS) — "introduced by the Government of India, EFFECTIVE 1 APRIL 2025, AS AN OPTION UNDER NPS FOR CENTRAL GOVERNMENT EMPLOYEES. UPS operates WITHIN THE EXISTING NPS ARCHITECTURE regulated by PFRDA and is applicable to BOTH SERVING AND RETIRED employees under specified conditions."

NPS SANCHAY — "a SIMPLIFIED NPS VARIANT under the All Citizen Model and Multiple Schemes Framework (MSF) FOR THE INFORMAL SECTOR. Eligible persons are Indian citizens AGED 18 TO 85 YEARS as on the date of application."

NPS VATSALYA — ⚠️ "towards the goal of A PENSIONED SOCIETY FOR VIKSIT BHARAT @ 2047... a PARENT OR A LEGAL GUARDIAN OF A MINOR (less than 18 years of age) can open and contribute... As the child turns 18 years old, they can choose to CONVERT IT INTO AN ALL CITIZEN MODEL ACCOUNT OR EXIT."

NPS e-SHRAMIK (Platform Service Partner model) — ⚠️ "extends NPS to GIG AND PLATFORM WORKERS through AGGREGATORS SUCH AS FOOD-DELIVERY AND RIDE-HAILING PLATFORMS, on a contribution model, with a QUICK TWO-PHASE ONBOARDING and NO MINIMUM THRESHOLD beyond any the aggregator sets."

StAR NPS — "developed by BSE TECHNOLOGIES, a technology-enabled ASSISTED-ONBOARDING PLATFORM for PoPs and their Pension Agents, with FULLY DIGITAL KYC and a Rs 200 ONBOARDING CHARGE."

⚠️ MSME: "addressed NOT BY A SEPARATE SCHEME but as A PERSONA for which Pension Funds may design Multiple Scheme Framework schemes."

NPS SWASTHYA — ⚠️ "in view of the fact that OUT-OF-POCKET EXPENDITURE DURING OLD AGE serves as a major outflow of retirement savings, PFRDA introduced the NPS Swasthya Scheme wherein it COMBINES THE OLD AGE INCOME SECURITY WITH HEALTHCARE COVERAGE to ensure that a subscriber is safeguarded against BOTH the issues with A SINGLE PRODUCT."

1.2 The PRAN

⚠️ "The PRAN is PORTABLE ACROSS EMPLOYERS AND LOCATIONS, whether in the government sector, private sector or self-employed. A subscriber may choose to have MULTIPLE NPS ACCOUNTS WITH DIFFERENT CRAs UNDER SEPARATE PRANs UNDER A SINGLE PAN."

1.3 What the NPS promises — and does not

"The NPS is a CONTRIBUTORY pension system where the subscriber contributes to the fund OVER THEIR WORKING LIFE and at retirement DRAWS THE CORPUS SO CREATED TO BUY AN ANNUITY that will provide regular income in retirement."

The five flexibilities the NPS gives the subscriber:

1. ⚠️ "THE CONTRIBUTION they want to make (EXCEPT IN THE GOVERNMENT MODEL where there is a PRESCRIBED MINIMUM contribution by the employee)".
2. "The PERIOD for which they will make the contribution".
3. "The TYPE OF FUNDS in which the contribution has to be invested".
4. "The FUND MANAGER who will manage the funds".
5. "The facility to TRACK THE PERFORMANCE of their funds and SWITCH between funds and fund managers".

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2. The unbundled architecture

Why this design matters — four stated advantages:

1. ⚠️ "There is NO CONCENTRATION OF DECISION-MAKING AUTHORITY WITH A SINGLE ENTITY and each entity functions independently, THEREBY REDUCING THE RISK OF MISUSE AND FAILURE OF THE SYSTEM".
2. "Clearly defined reporting roles... means that there are CHECKS AND BALANCES AT EACH STAGE".
3. "Subscribers are given the option to CHOOSE AMONG DIFFERENT ENTITIES providing a service. This increases the EFFICIENCY AND SERVICE-ORIENTATION of the intermediaries".
4. "The regulations that govern the role, responsibility and authority of each intermediary is DISTINCT".

⚠️ The safety net: "In the event of an intermediary being UNABLE TO CONTINUE to provide services, there are CLEARLY LAID DOWN PROCEDURES TO TRANSFER THE SUBSCRIBERS AND ASSETS TO AN ALTERNATIVE SERVICE PROVIDER AT NO ADDITIONAL COST TO THE SUBSCRIBER."

2.1 NPS Trust

⚠️ "A trust set up under the INDIAN TRUSTS ACT and PFRDA IS THE SETTLOR of NPS Trust."

"The PRIMARY FUNCTION is TO HOLD AND MANAGE THE ASSETS AND FUNDS created out of the contributions made by the subscribers and HELD IN THEIR BENEFICIAL INTEREST."

"The Board of Trustees have the FIDUCIARY RESPONSIBILITY for taking care of the funds and protecting the subscribers' interests." It "MONITORS AND EVALUATES the functioning of ALL the intermediaries" — CRA, PoPs, Trustee Bank, Pension Funds, Custodians.

(A 2019-20 Budget announcement said steps would be taken to separate the NPS Trust from PFRDA to maintain an arm's length relationship.)

2.2 Points of Presence (PoP)

⚠️ "The PoP is THE FIRST POINT OF INTERACTION between the subscriber and the NPS and constitutes THE BACKBONE OF A STRONG AND EFFECTIVE DISTRIBUTION SYSTEM."

Authorised branches acting as collection points are called PoP-Service Providers (PoP-SP), alongside Pension Agents and Pension Sakhis.

Its functions: information to prospects · accepting registration forms and KYC documents · verifying KYC documents · submitting applications to CRA for PRAN generation · processing contributions · maintaining records · changes in personal details · change in investment scheme/fund manager · change of PoP-SP · withdrawal requests (exit or partial) · shifting between models · printed account statements · ⚠️ "Accepting grievances and UPLOADING THE SAME ON THE CENTRAL GRIEVANCE MANAGEMENT SYSTEM (CGMS) of CRA ON A DAILY BASIS."

PENSION AGENTS — a 2025–2026 addition. ⚠️ Under the PFRDA (Point of Presence) Regulations, 2018, a PoP may engage Pension Agents defined to include "RBI's BANKING CORRESPONDENTS, IRDAI-REGISTERED INSURANCE AGENTS, AMFI-REGISTERED MUTUAL-FUND DISTRIBUTORS, and ANY OTHER PERSON PERMITTED BY THE AUTHORITY."

⚠️ The limits on an agent: "A Pension Agent FACILITATES REGISTRATION, CONTRIBUTIONS AND SERVICE REQUESTS BUT CANNOT PROCESS EXIT OR WITHDRAWAL REQUESTS. The PoP REMAINS FULLY LIABLE for the agent's acts and for KYC/anti-money-laundering compliance, and must MONITOR, SUPERVISE AND TRAIN the agent. Each agent is identified by its PERMANENT ACCOUNT NUMBER across PoPs, and every PoP must publish a HALF-YEARLY LIST of its agents and designate a NODAL OFFICER."

2.3 Central Recordkeeping Agency (CRA)

Its functions: maintaining subscriber records · ⚠️ issuing the PRAN and maintaining the database · issuing PRAN card, User-ID, I-PIN and T-PIN · account maintenance (scheme change, fund manager change, demographic details, nomination) · ⚠️ "ACTING AS THE INTERFACE BETWEEN THE VARIOUS INTERMEDIARIES" including unitisation of contributions based on scheme NAV · ⚠️ "Periodically sending pension account statement to each subscriber AT THE END OF THE FINANCIAL YEAR WITHIN 2 MONTHS" · providing a centralized grievance management system · measuring fund performance using NAVs declared by the pension funds · coordinating with the trustee bank for withdrawals and with the ASP · processing exit/withdrawal requests.

2.4 Pension Funds

"PROFESSIONAL FUND MANAGERS APPOINTED BY THE PFRDA for investing the contributions... and managing them."

⚠️ TEN Pension Funds are active: Aditya Birla Sun Life · Axis · DSP · HDFC · ICICI Prudential · Kotak Mahindra · LIC · SBI · Tata · UTI Retirement Solutions.

Functions: investing as per mandate · constructing the portfolio · ⚠️ "Computing and declaring scheme NET ASSET VALUE ON A DAILY BASIS" · maintaining books · reporting · public disclosures · offering customised MSF schemes.

Three hard rules:

• ⚠️ "The pension fund is NOT ALLOWED TO INVEST (DIRECTLY OR INDIRECTLY) OUTSIDE INDIA".
• ⚠️ "The pension funds DO NOT OFFER ANY IMPLICIT OR EXPLICIT ASSURANCE OF BENEFITS to subscribers EXCEPT under market based guarantee mechanism TO BE PURCHASED BY THE SUBSCRIBER".
• "The securities purchased are HELD IN THE NAME OF NATIONAL PENSION SYSTEM TRUST and VALUED AT MARKET VALUE for computing the scheme NAV".

2.5 Trustee Bank

"Handles the FUNDS SIDE of the transactions between various entities. It is authorized to HOLD THE FUNDS ON BEHALF OF THE NPS TRUST for the beneficial interests of the subscribers."

⚠️ AXIS BANK LTD. is currently the designated trustee bank.

Eligibility criteria (PFRDA (Trustee Bank) Regulations, 2015):

• A SCHEDULED COMMERCIAL BANK, registered and regulated by the RBI, with EXTENSIVE RURAL AND URBAN NETWORK of branches.
• ⚠️ "Must have made a NET PROFIT IN THE LAST THREE CONSECUTIVE FINANCIAL YEARS and must satisfy the MINIMUM CAPITAL ADEQUACY RATIO specified by the RBI".
• "Authorized to undertake the business of THE CENTRAL AND STATE GOVERNMENTS".
• "ALL BRANCHES SHOULD BE NETWORKED and the bank should have CASH MANAGEMENT SERVICES business".
• "Commitment to establish TECHNOLOGICAL COMPATIBILITY with the CRA".

Its role: "receives funds from the nodal offices/PoPs, RECONCILES IT WITH THE SUBSCRIBER CONTRIBUTION FILE and transfers it to the pension funds; in case of exit/withdrawals it transfers funds to subscribers and annuity service providers."

2.6 Annuity Service Providers (ASPs)

⚠️ "LIFE INSURANCE COMPANIES EMPANELLED BY THE PFRDA to provide the annuity... Currently there are 15 ASPs empanelled under PFRDA and are REGULATED BY IRDAI."

2.7 Custodian

⚠️ "A custodian REGISTERED WITH SEBI, appointed by PFRDA, whose CROSS-HOLDING, IF ANY, by a pension fund or its sponsors, trustee bank or CRA SHOULD BE LESS THAN 50 PERCENT."

⚠️ "The custodian currently appointed is DEUTSCHE BANK, engaged for a FIVE-YEAR TERM WITH EFFECT FROM 1 APRIL 2022; it holds the securities IN THE NAME OF THE NPS TRUST and facilitates their DELIVERY, SETTLEMENT AND CORPORATE-ACTION BENEFITS."

2.8 Retirement Adviser — your own role

"INDIVIDUALS, REGISTERED PARTNERSHIP FIRM, BODY CORPORATE, OR REGISTERED TRUST OR SOCIETY registered with the PFRDA for providing advice on NPS or other pension scheme regulated by PFRDA."

⚠️ "Retirement adviser MAY HAVE A TIE UP WITH THE POINTS OF PRESENCE... and THERE IS NO RESTRICTION ON THE NUMBER OF PoPs with whom the Retirement Adviser may have such arrangements."

Registered under the PFRDA (Retirement Adviser) Regulations, 2016. The obligations:

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3. The models

Beyond the four: NPS Vatsalya (minors) · MSF branded schemes · NPS Lite–Swavalamban (a legacy model, closed to fresh entry EXCEPT FOR GRAMIN DAK SEVAKS) · NPS Swasthya · NPS Sanchay · NPS e-Shramik and the Retirement Income Scheme (RIS)/Drawdown options.

3.1 Government Model

⚠️ "Every month 10 PERCENT OF SALARY (BASIC + DA) is contributed by THE EMPLOYEE and 14 PERCENT OF SALARY BY THE GOVERNMENT."

The process: the application goes to the DRAWING AND DISBURSING OFFICER (DDO), who "verifies the information, CERTIFIES THE EMPLOYMENT DETAILS and ATTESTS THE DATE OF BIRTH", then forwards it to the CRA. The DDO also handles change requests, withdrawal requests and grievances. Digital registration via Aadhaar or PAN, or eNPS, is also available.

⚠️ From 1 April 2019, Government subscribers may choose their own investment pattern and pension fund. "The current system of allocating the funds among the THREE PUBLIC SECTOR fund managers (LIC, SBI, UTI) based on their PAST PERFORMANCE will continue as THE DEFAULT OPTION." Subscribers "can change their option ONCE A YEAR", may choose 100% in government securities, or pick LC-25 (max 25% equity) or LC-50 (max 50% equity); the investment plan can be changed FOUR TIMES in a financial year.

⚠️ "The GOVERNMENT PAYS THE COST related to opening and maintaining the TIER I account... The charges associated with the TIER II ACCOUNT IS BORNE BY THE SUBSCRIBER."

EXPANDED INVESTMENT CHOICE from December 2025 — six choices for Central Government NPS and UPS subscribers:

1. The DEFAULT SCHEME managed by the three public-sector Pension Funds.
2. Active Choice with 100 percent in GOVERNMENT SECURITIES.
3. Auto Choice — Life Cycle 25 (Low), up to 25 percent equity.
4. Auto Choice — Life Cycle 50 (Moderate), up to 50 percent equity.
5. Auto Choice — Life Cycle 75 (High), up to 75 percent equity.
6. Auto Choice — Life Cycle (Aggressive/Balanced), up to 50 percent equity until age 45 before tapering.

⚠️ "A NON-DEFAULT subscriber must choose ONE OF THESE FIVE NON-DEFAULT OPTIONS TOGETHER WITH ANY ONE OF THE TEN REGISTERED PENSION FUNDS (NOT ONLY THE THREE PUBLIC-SECTOR MANAGERS). In the Default Scheme itself, the CEILING ON EQUITY was RAISED TO 25 PERCENT WITH EFFECT FROM 1 APRIL 2025."

3.2 All Citizen Model

"The subscriber signs on DIRECTLY and makes PERIODIC VOLUNTARY CONTRIBUTIONS. The subscriber will decide the RECORD KEEPER (CRA), PENSION FUND and HOW THE FUNDS CONTRIBUTED WILL BE INVESTED." ⚠️ "The charges associated with opening and maintaining BOTH the Tier I and Tier II account IS PAID BY THE SUBSCRIBER."

3.3 Corporate Model

Available to "entities registered under the COMPANIES ACT, various COOPERATIVE ACTS, CENTRAL AND STATE PUBLIC SECTOR ENTERPRISES, PARTNERSHIP FIRMS AND LLPs, PROPRIETORSHIPS, TRUSTS AND SOCIETIES."

⚠️ The advantage to the company: "They can provide retirement benefits USING THE ESTABLISHED NPS ARCHITECTURE INSTEAD OF TAKING ON THE RESPONSIBILITY OF SETTING UP AND MANAGING TRUSTS, INVESTING THE FUNDS AND PROVIDING ANNUITY."

⚠️ "The contribution may be made by THE EMPLOYER ALONE, EMPLOYEE ALONE, OR THE EMPLOYER AND EMPLOYEE IN ANY DECIDED PROPORTION."

On the investment choice: ⚠️ "Can be made EITHER AT EMPLOYER LEVEL or the employer MAY GIVE THAT FLEXIBILITY TO THE EMPLOYEES. However, WHOEVER EXERCISES THE CHOICE SHOULD SELECT BOTH THE PENSION FUND AND THE ASSET ALLOCATION, and in case the employer exercises the choice, THE EMPLOYEES AFTER ONE YEAR WILL HAVE THE OPTION TO EXERCISE THEIR OWN CHOICES."

RECLASSIFICATION (2026): ⚠️ "Under the PoP charge circulars dated 10 MARCH 2026, the erstwhile 'Corporates' were RECLASSIFIED INTO (i) GOVERNMENT ENTITIES and (ii) LEGAL ENTITIES (OTHER THAN GOVERNMENT), and the charges for the latter moved to THE SAME AUM-BASED STRUCTURE AS THE ALL CITIZEN MODEL — 0.20 PERCENT PER ANNUM of AUM... Where a corporate is a Central or State Government-owned body, ITS EMPLOYEES' EXIT IS GOVERNED BY THE GOVERNMENT-SECTOR RULES."

Transfers into the NPS: ⚠️ "Employees can now get their RECOGNIZED PROVIDENT FUND/SUPERANNUATION FUND TRANSFERRED TO THE NPS... The amount so transferred WILL NOT BE TREATED AS INCOME for the current assessment year and THERE WILL BE NO TAX PAYABLE ON THE TRANSFER."

⚠️ "Subscribers to the All Citizens Model (Tier I), Corporate Model (Tier I) and Tier II accounts can now select UP TO 3 PENSION FUNDS in accordance with asset classes (EXCEPT ALTERNATE ASSET CLASS). This facility is available ONLY TO SUBSCRIBERS UNDER THE ACTIVE CHOICE."

3.4 Atal Pension Yojana

"Launched to provide DEFINED PENSION to the WEAKER SECTIONS of the society, based on AGE OF ENTRY, CONTRIBUTIONS MADE AND THE PERIOD OF CONTRIBUTION."

⚠️ "The subscriber will draw minimum fixed pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, Rs 5,000 PER MONTH FROM THE AGE OF 60 YEARS."

The contribution ladder for a Rs 5,000 pension:

The government co-contribution — now history: ⚠️ "The GoI HAD CONTRIBUTED 50 PER CENT of the subscriber's contribution amount, SUBJECT TO A CAP OF Rs 1,000 PER ANNUM, for a period of FIVE YEARS (FY 2015-16 TO FY 2019-20), and this was available ONLY FOR THOSE WHO ENROLLED ON OR BEFORE 31 MARCH 2016. This Government co-contribution HAS SINCE ENDED."

⚠️ "With effect from 1 OCTOBER 2022, ANY CITIZEN OF INDIA WHO IS OR HAS BEEN AN INCOME-TAX PAYER IS NOT ELIGIBLE TO ENROL IN APY."

"Workers in the unorganized sector will NOT be eligible for the co-contribution IF THE PAY IS COVERED UNDER ANY OTHER EXISTING SOCIAL SECURITY SCHEME SUCH AS THE EPF, or if the person is an income tax payer." ⚠️ "THE PENSION IS GUARANTEED BY THE GOVERNMENT OF INDIA."

Operational details: implemented through scheduled commercial banks, regional rural banks and Core Banking enabled Post Offices; ⚠️ "It is MANDATORY to provide the savings bank account details and AUTHORIZATION LETTER to enable AUTOMATIC DEBIT"; eAPY is the digital onboarding facility by Protean using Aadhaar based eKYC.

⚠️ On default: "In case of default there will be A PENALTY IMPOSED... the contribution will have to be paid in the SUBSEQUENT PAYMENT CYCLE, ALONG WITH THE OVERDUE INTEREST. Deduction will be made for ACCOUNT MAINTENANCE CHARGES... EVEN IF THE ACCOUNT IS IN CONTINUOUS DEFAULT. THE ACCOUNT WILL BE CLOSED WHEN THE CORPUS COMES DOWN TO ZERO. The Government's contribution, if any, to an account in default that is being closed, WILL BE RETURNED TO THE GOVERNMENT."

⚠️ "The APY contributions are invested according to norms specified by the government PREDOMINANTLY IN GOVERNMENT SECURITIES, TERM DEPOSITS, OTHER DEBT SECURITIES. THE SUBSCRIBERS DO NOT HAVE A CHOICE ON INVESTMENT PATTERN OR PENSION FUND."

On death before 60: ⚠️ "The SPOUSE will have the option to CONTINUE THE CONTRIBUTION till the vesting age and receive the pension when it is due. The other option would be for the spouse to WITHDRAW THE ACCUMULATED CORPUS."

Swavalamban migration: existing subscribers aged 18–40 were migrated automatically to the APY; those opting out continue with Swavalamban till the age of exit. ⚠️ This does not apply where accumulated wealth "excluding government contribution and returns thereon is UP TO Rs 2 LAKH, in which case they may WITHDRAW THE AMOUNT AS A LUMP SUM."

3.5 Unified Pension Scheme

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4. Tier I and Tier II accounts

"Each subscriber can open TWO types of accounts: the TIER I account is the PRIMARY RETIREMENT SAVINGS ACCOUNT while the TIER II account is a VOLUNTARY INVESTMENT ACCOUNT. Both are offered under the SAME NPS ARCHITECTURE and have THE SAME FACILITIES AND INVESTOR PROTECTION MECHANISMS."

4.1 Tier I

"The RETIREMENT ACCOUNT, with RESTRICTIONS ON THE WITHDRAWAL of funds and its END USAGE." ⚠️ "A subscriber can make a MAXIMUM OF THREE NOMINATIONS to the Tier I account and specify the PERCENTAGE ALLOCATED TO EACH."

4.2 Tier II

⚠️ "A subscriber MUST HAVE A TIER I ACCOUNT to be able to open a Tier II account."

• ⚠️ "NO SEPARATE KYC formalities... for subscribers who have already complied at the time of opening the Tier I account".
• ⚠️ "There are NO CHARGES FOR OPENING a Tier II account".
• ⚠️ "For All Citizens Model subscribers, the PoP through which the Tier II account is activated SHOULD BE THE SAME as the one through which the Tier I account was registered. Subscribers under the GOVERNMENT MODEL may activate the Tier II account THROUGH ANY PoP".
• ⚠️ "The subscriber can choose A DIFFERENT PENSION FUND AND INVESTMENT OPTIONS for Tier I and Tier II".
• ⚠️ "The NOMINATIONS MADE IN THE TIER I ACCOUNT WILL NOT BE APPLICABLE TO THE TIER II ACCOUNT".
• ⚠️ "TIER-II SCHEMES CAN INVEST UP TO 100% OF THE FUNDS IN EQUITY ASSET CLASS".

4.3 Tier II Tax Saver Scheme (NPS-TTS), 2020

⚠️ "Available as an investment option to ANY CENTRAL GOVERNMENT SUBSCRIBER who has an ACTIVE TIER I PENSION ACCOUNT."

• **Tax benefit under section 123 read with Schedule XV of the Income-tax Act, 2025 (corresponding to section 80C), aggregate limit Rs 1,50,000; ⚠️ available under the OLD TAX REGIME, NOT the new.
• ⚠️ "LOCK-IN PERIOD OF 3 YEARS from the date on which the units are credited" — including any reinvestment.
• ⚠️ Portfolio: "BETWEEN 10%-25% IN EQUITY, UP TO 90% IN DEBT, and UP TO 10% IN CASH, MONEY MARKET INSTRUMENTS AND LIQUID SCHEMES".
• ⚠️ "Maximum of 3 PENSION FUNDS separately for NPS-TTS. Any CHANGE IN PENSION FUND WILL BE PERMITTED ONLY AFTER THE LOCK-IN PERIOD".
• ⚠️ "NO WITHDRAWAL during the lock-in. HOWEVER, IF THE SUBSCRIBER DIES THE NOMINEES OR LEGAL HEIR CAN WITHDRAW THE CORPUS".
• "If the subscriber CLOSES THE TIER I ACCOUNT then further contribution to the NPS-TTS will not be permitted and the corpus may be withdrawn ON COMPLETION OF THE LOCK-IN".

4.4 Tier I versus Tier II — the comparison table

Note the Rs 500/Rs 1,000 inversion. Tier I opens with Rs 500 but Tier II needs Rs 1,000; then Tier I's subsequent minimum stays at Rs 500 while Tier II drops to Rs 250. It is the one place where the "serious" account has the lower entry figure.

4.5 No third party contribution

⚠️ "THIRD-PARTY CONTRIBUTIONS ARE NOT ALLOWED FOR BOTH TIER I AND TIER II ACCOUNT."

⚠️ The single exception: "This restriction should be read SEPARATELY FROM NPS VATSALYA, where the Guidelines provide that, IN ADDITION TO PARENTS/GUARDIANS, RELATIVES AND FRIENDS MAY GIFT CONTRIBUTIONS to the subscriber."

"The PoP/nodal office has to ensure that the contributions are being made THROUGH THE SUBSCRIBER'S BANK ACCOUNT FROM HIS LEGITIMATE SOURCE OF INCOME. A DECLARATION to this effect is taken EVERY TIME a contribution is made to the Tier II account." ⚠️ Corporate-sector subscribers with an employer arrangement may contribute to Tier II by salary deductions.

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5. Fees and charges

5.1 Investment Management Fee — slab based, from 1 April 2026

5.2 The three mechanisms for paying charges

1. ⚠️ UPFRONT to the intermediary — "an ABSOLUTE AMOUNT, say Rs 20 for a switch request, OR a PERCENTAGE of the value of the transaction, say 0.25 percent of the contribution with maximum of Rs 25,000".
2. ⚠️ BY CANCELLING UNITS — "if an investor has to pay a charge of Rs 100 and the NAV of the units of the schemes in which their funds are invested (50:50) are Rs 12.5 and Rs 20, then Rs 50 is charged from the first scheme by cancelling 4 UNITS (Rs 50 ÷ 12.5) and 2.5 UNITS are cancelled from the second (Rs 50 ÷ 20)".
3. ⚠️ DEDUCTED WHILE COMPUTING NAV — "the INVESTMENT MANAGEMENT FEE, CUSTODIAN FEE AND NPS TRUST EXPENSES are deducted from the value of the investments while calculating the Net Asset Value".

5.3 The current schedule (2026)

"All figures are EXCLUSIVE OF APPLICABLE GOODS AND SERVICES TAX."

⚠️ One point on trail: "TRAIL COMMISSION IS PAID TO THE PoP EVEN WHEN THE SUBSCRIBER CHOOSES TO USE D-REMIT OR eNPS, which are online modes of contribution."

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6. Eligibility and disqualification

Who may join: ⚠️ "Any citizen of India, WHETHER RESIDENT OR NON-RESIDENT, between 18 YEARS AND 85 YEARS of age... OVERSEAS CITIZENS OF INDIA (OCI) are also permitted, subject to applicable conditions."

Three further rules:

1. ⚠️ "A person can hold ONLY ONE NPS ACCOUNT. The subscriber's account CAN SHIFT BETWEEN PRIVATE, GOVERNMENT AND CORPORATE MODELS, depending upon the employment status".
2. ⚠️ "Being a member of ANY OTHER SOCIAL SECURITY PROGRAM OR PENSION FUND, SUCH AS THE PROVIDENT FUND, whether government sponsored or private, DOES NOT PRECLUDE an individual from subscribing to the NPS".
3. ⚠️ "NRIs and OCIs are eligible to open an NPS TIER I account... TIER II ACCOUNT IS NOT PERMITTED FOR NRI AND OCI SUBSCRIBERS." Contributions "through INWARD REMITTANCE or from the subscriber's own NRE/NRO ACCOUNT"; at exit, payments are "made IN INDIAN RUPEES and REPATRIATION IS SUBJECT TO APPLICABLE FEMA AND RBI GUIDELINES".

⚠️ On continuation: "The entry age is now 85 and the CONTINUATION/DEFERMENT AGE IS 85 AS WELL. A subscriber may therefore REMAIN IN NPS, KEEP CONTRIBUTING, AND DEFER THE LUMP-SUM WITHDRAWAL OR ANNUITY PURCHASE, UP TO THE AGE OF 85."

Minimum contribution to Tier I: ⚠️ "Rs 1,000 IN A YEAR over a minimum of AT LEAST ONE CONTRIBUTION OF NOT LESS THAN Rs 500." Accepted modes: cash, local cheque, demand draft and online transfers.