Presentation on CAB Model Under New Pension System

Structure of the Presentation

1 2 NPS Architecture 3 Operating Process 4 Investment Options

Current Status

• Over 1.24 million subscribers registered NPS across Central Government, State Government, UoS • 27 State Governments/UTs has adopted NPS for their employees • 4 Corporate already on board including National Aluminum Corporation (NALCO), Agriculture Insurance Corporation (AIC) • Many other corporate intends to join NPS. Coal India Limited, IBA, General Insurance Companies are in the process of loging • Launch of NPS Lite by Honorable Finance Minister in September 2010 • 39 entities including Public Sector & Private Sector Banks acting as Point of Presence under NPS

Pr.AO

Intermediaries

Trustee Bank CRA Regulator Bank of India Pension Fund Manager SBI/ UTI/ IDFC /Kotak/Reliance/ ICICI Prudential Stock Holding Corp (SCHIL) Custodian NSDL To be Appointed Annuity Service Provider To be Appointed (SAB) Nodal Offices

Process under NPS

• Registration of Entities • Registration of Nodal Offices • Registration of Subscribers • Contribution Processing • Preparation and Upload of SCF • Transfer of Funds to Trustee Bank • Matching & Booking Process • Subscriber Maintenance • Change in subscriber personal/employment details • New Scheme Setup • Re-printing of I-Pin, T-Pin or PRAN Card • Grievance Management • Logging of Grievances • Grievance Redressal

Role of Nodal Offices

• Registration of the Nodal offices and Subscribers • Uploading Subscriber’s monthly contribution (SCF) details to CRA • Transfer of subscriber contribution amount to Trustee Bank • Subscriber Maintenance • Grievance logging and resolution

Registration Hierarchy

Nodal offices centrally registered with CRA

Subscribers will be mapped to DDOs, DDOs will be mapped to Pay & Account Office (PAO) and PAOs will be mapped with Principal Account Office (Pr. AO)

Nodal Office Registration

Registration Forms available at CRA Website www.npscra.nsdl.co.in

Form N1 Form N2

Forwarding Form N2 with covering letter

C R A Form N3

Forwarding Form N3 with covering letter-N4

Details to be submitted to CRA – Name of the Office, Address, Email id, Authorised Signature & Stamp

Nodal Office Registration

• Pr. AO and PAO to be registered on the basis of physical applications • DDO can be registered on the basis of soft copy data on the basis of the format provided by CRA or through Forms • Consolidated data to be provided by a single office.

• Checks on uniqueness and duplicity of the DDO data provided • Allotment of Unique Registration Number by CRA • Intimation of registration number by CRA • Issue of I-Pin & T-Pin for accessing NPSCAN/CRA and IVR facility • Standard Operating Procedures/Utility at CRA website for using NPSCAN/CRA

Subscriber Registration Process

Model of Upload

1. Centralized Model :

Centralized upload of data and transfer of funds by Directorate

2. Decentralized Model:

Decentralized upload of data by and transfer of funds by DTO

3. Quasi Centralized Model:

Decentralized upload of data by DTO and Centralized fund transfer by Directorate

Centralized Mode

Mode A (Centralized)-

In this Mode, Directorate would prepare consolidated subscriber contribution file based on contributions prepared at various DTO/ DDO and upload the same in the central NPSCAN system. Also this office would make one consolidated payment to the bank.

Consolidated Contribution File CRA System Pr. AO Consolidated Contribution Payment PAO/ DDO Trustee BANK

De-centralized Mode

Mode B (De-centralized) -

In this Mode, the DTO on behalf of his/her underlying subscriber will prepare and upload the subscriber contribution file and thereafter will remit the contribution amount of subscriber to the trustee bank.

Contribution File Contribution Amount

Quasi - Centralized Mode

Mode C (Quasi-centralized) -

In this Mode, each DTO would prepare subscriber contribution file based on contributions received and upload into NPSCAN system. However the Directorate would make one consolidated payment against all the SCF uploaded by DTO to the trustee bank. Consolidated Contribution Payment Contribution File Details Uploaded on NPSCAN Contribution File

Subscriber Contribution Processing

1. Consolidation of Subscription Directorate/DTO FPU 2. Digitization FVU 3. Validate File 4. File Upload 7. Submission of CSF & Transfer of funds 5. Generation & Printing of CSF CRA 8. Fund Receipt Trustee Bank Confirmation 6. Data Transfer NPSCAN

Utilities

• What is a File Preparation Utility (FPU)?

o A utility provided by CRA that will assist in preparation of SCF as per the file formats of CRA. • What is a File Validation Utility (FVU)?

o A Utility provided by CRA that will verify whether the SCF prepared is as per format of the CRA

How to acquire the FPU and FVU?

The FPU/FVU will be made available for download at www.npscra.nsdl.co.in. The Path for downloading the FPU/FVU -Downloads --Software Downloads ---All citizens of India ----Utilities -----Contribution Upload

FPU and Its Features

• The FPU is a stand alone utility installed on a local machine. • Connection to Internet is not required for using the FPU.

• FPU will generate the SCF as per the specified CRA file formats.

• FPU is easy to use with excel-type features.

File Preparation Utility

File Preparation Utility

Creating SCF file

Creating SCF file

File Validation Utility

Upload to CRA

• Logon to CRA at www.cra-nsdl.com • Requirement of DSC for SCF Upload • FVU validated SCF to be uploaded • Generation of File Reference Number (FRN)

Contribution Upload

Attaching a file

File Reference Number

File Status View

File Status View

Contribution Submission Form

Contribution Submission Form… Contd

Subscriber Maintenance

Change Details/ Transaction Request Acknowledgement Number Data upload on successful transaction Data upload Intimation through Email

Grievance Management

Status through website/email/IV R/call centre

Getting Started

• Approach PFRDA for Joining NPS • Issuance of Authorization Letter by PFRDA • Appointment of Designated office as single point contact with CRA • Execution of Contract with CRA • Decision on the model of interface with CRA • Registration of Nodal Offices • Registration of Subscribers • Transfer of legacy data and funds • Commencement of subscribers’ contribution upload

Contact: Pension Fund Regulatory and Development Authority

Tel. No. + 91 - 11 - 26897937 Fax No. + 91 – 11 – 26897938 E-mail: www.pfrda.org.in

Central Government – Investment

• • Scheme applicable for Central Government Employees Investments across Government Fund Managers o o SBI Pension Funds Limited (33%) UTI Retirement Solutions Limited (32%) o o LIC Pension Fund Ltd (35%) Above allocation is reviewed annually by PFRDA/NPS Trust based on performance Investments norms In accordance with Ministry of Finance guidelines for Non Govt. Provident funds and Superannuation funds o o o o Government securities Upto 55 Debt securities Upto 40 Money market instruments Upto 5 Equity Upto 15

Charge Structure

Getting Money Out

Vesting Criteria Benefit At any point in time before 60 years of Age On attaining the Age of 60 years and upto 70 years of age Death due to any cause The Subscriber would be required to invest at least 80% of the pension wealth to purchase a life annuity from any IRDA – regulated life insurance company, which is appointed by PFRDA. Rest 20% of the pension wealth may be withdrawn as lump sum.

At exit the Subscriber would be required to invest minimum 40 percent of his/her accumulated savings (pension wealth) to purchase a life annuity from any IRDA-regulated life insurance company, which is appointed by PFRDA..

The Subscriber may choose to purchase an annuity for an amount greater than 40 percent. The remaining pension wealth can either be withdrawn in a lump sum on attaining the age of 60 or in a phased manner, between age 60 and 70, at the option of the subscriber.

In such an unfortunate event, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. However, if the nominee wishes to continue with the NPS, he/she shall have to subscribe to NPS individually after following due KYC procedure.