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Hi,

The National Pension Scheme (NPS) will be available for common people from

today, making the pension management easier for everyone. Now onwards,

everyone can get pension by investing some amount of money monthly or annually.The new pension scheme was launched for the general public by the Pension Fund

Regulatory and Development Authority (PFRDA). Under this scheme, people, who

invest money in the pension fund during their working life, will get back the money

partly as a lump sum and partly as an annual payment or pension.

Here are the Key Features of the new National Pension Scheme:

1) Any Indian citizen between 18-55 years of age can join the scheme.

2) Tier-I of the scheme will offer a non-withdrawal account.

3) Tier-II account will be introduced later, which will allow all to withdraw money.

You can't open a Tier-II account without opening a Tier-I account.

4) Visit any Point of Presence (POP) and fill up the documents. They will help you

with the details.5) After registration, you will receive a Permanent Retirement Account Number

(PRAN).

6) Minimum investment limit is Rs. 6,000 per annum. There is no maximum limit.

You can invest as much money as you wish.

7) Your investments are not guaranteed and they will depend on your contribution

and the investment growth at the time of exit.

8) The fund will be invested in three categories - equity, government bonds and

corporate bonds. Investors will have the option to decide about the type of funds

and the amount of money to be invested. If you are unable to choose between any of

these options, you can go for the Auto Choice Lifecycle Fund.

9) In Auto Choice Lifecycle Fund, 50% of the amount in your pension account willbe invested in equity, 30% in corporate bonds and the remaining 20% in

government securities. After 36, the proportion of investments in equity and

corporate bonds will decrease annually, while the investment in government

securities will increase.

10) The normal retirement age is fixed at 60 years.

11) At 60, you will be required to use at least 40 per cent of your accumulated

savings to buy a life annuity from an insurance company.

12) If you want to exit before 60, you can withdraw 20 per cent of the accumulated

savings but buy an annuity with the remaining 80 per cent.

13) If the pensioner dies before 60, the nominee will receive the entire pension

money.

14) The investors will have the option to shift their fund from one fund manager to

another.

15) The Pension Fund will be managed by six Fund Managers - SBI, UTI Asset

Management, ICICI Prudential Life Insurance, Reliance MF, IDFC Mutual Fund

and Kotak Mahindra. The annual fee for the fund management will be 0.0009% of

the invested amount.

16) The National Pension Scheme will have tax benefits under Section 80C. You can

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avail tax benefits up to Rs. 1 lakh annually. The minimum annual contribution to

the pension fund is fixed at Rs. 6,000.

17) To open a pension account, you can approach State Bank of India and all its

seven subsidiaries as well as ICICI Bank and Punjab National Bank.

Regards

Dileep Kulkarni