time to investment in new pension systemnew pension system

8/11/2019 Time to Investment in New Pension SystemNew Pension System

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New Pension SystemPension nahi yeh Pran hai

NSDL

Click Here For More Details
http://www.elitestock.com/contactus1.aspx


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Plan early for those SUNSET YEARS:



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How do you prepare your self for

Life after Retirement:



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Add Pension to SAVINGSTraditionally Pension is a not a part of the savings

Add it Now



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Government of India introduced NPS for Central Government Employees joining

services w.e.f 1 st Jan 2004. On 1 st May 2009, on voluntary basis NPS was made available for

All citizens of India.

PFRDA was created as regulator for the Pension sector.

NPS is based on Personal retirement accounts (PRAs) created for individual members.

NPS accretes savings into subscribers PRA while he is working and use the

accumulations at retirement to procure a pension for the rest of his life.

What is New Pension System (NPS)?

AgeGroup

0 to 1818 to 60

NPS aims at creating enoughcorpus, to enable subscriberfor purchasing Annuity post

retirement

60 Onwards



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Why NPS is a Smart Choice?



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NPS - Account Opening Phase Every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card

12 digit unique number

Issued by Government of India

In case lost/stolen, Provision of reprint ofPRAN card on chargeable basis



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NPS - Tier II Account

Tier II is a pension savings account, with a facility for withdrawal tomeet financial contingencies

No Account Opening & Account Maintenance Charges by CRAOnly transactions are charged by CRA & POPsNo limit on withdrawals from Tier II accountInvestment Patterns same as Tier I

Minimum Contribution at the time of account opening Rs. 1000

Minimum amount per contribution Rs. 250

Minimum amount balance at the end of financial year Rs. 2000

Minimum no. of contributions 1 per year



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NPS - Investment Options

ICICI Prudential Pension Fund Kotak Mahindra Pension Fund Reliance Capital Pension Fund SBI Pension Fund UTI Retirement Solutions Pension Fund

IDFC Pension Fund Management Company Ltd

Choice of Six PensionFunds

Asset Class E: Equity Asset Class C: Fixed Income Asset Class G: Government Securities

Choice of ThreeSchemes

Active Choice (Active Fund Management bySubscriber)

Auto Choice (Default scheme with a life cyclefund option)

Choice of Approach



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NPS - Schemes / Investment Approach

NPS offers two approaches to invest subscriber money

Active choice - Individual Funds (Asset class E, C, and G )

Auto choice Lifecycle Fund

Gives the subscriber right todecide as to how his contribution

is to be invested

Where the subscriber doesnt

have financial knowledge, thecontribution will be made in pre-

defined portfolio



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NPS - Active Choice



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NPS - Auto Choice



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NPS - Charges Structure

Intermediary Charge head Service Charges* Method ofDeductionCRA PRA Opening charges Rs. 50 Through

cancellation ofunits

Annual PRA Maintenance cost peraccount

Rs. 225

Charge per transaction Rs. 5POP(MaximumPermissible Chargefor each subscriber)

Initial subscriber registration andcontribution upload

Rs. 100 + 0.25 % of theamount subject to

minimum of Rs 20 andmaximum of Rs 25000

To be collectedupfront

Any subsequent transactions Rs. 20

Trustee Bank Per transaction emanating from a RBIlocation

Zero

Through NAVdeductionPer transaction emanating from anon-RBI location

Rs. 15

Custodian(On asset valuein custody)

Asset Servicing charges 0.0075% p.a for Electronicsegment & 0.05% p.a. forPhysical segment

Through NAVdeduction

PFM charges Investment Management Fee Upto 0.25% p.a. Through NAVdeduction*Service tax and other levies, as applicable, will be levied as per the existing tax laws.



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Annuity in NPS

Annuity is the fixed monthly (periodic) income which a subscriber will get against thecorpus invested.

In case of normal retirement, subscriber can annuities a minimum of 40% and maximum

of 100 % of his corpus towards buying annuity.

NPS provides an option to the subscriber to decide his retirement age which can be

anytime before 60. In such case subscriber can annuities a minimum of 80% and

maximum of 100 % of his corpus towards buying annuity.

At the time of exit the subscriber will have an option to purchase annuity online.



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Annuity SelectionSubscriber would be given the following online facilities

Selection of Annuity Service Provider (ASP).Selection of annuity scheme.Option to change ASP & scheme (if already registered) before attaining retirement

age.The entire transfer of amount between NPS System and ASP will take without any

manual intervention.ASP empanelled by PFRDA.

1. Bajaj Allianz Life Insurance Co. Ltd.

2. HDFC Life Insurance Co. Limited3. ICICI Prudential Life Insurance Co. Ltd.4. Life Insurance Corporation of India5. Reliance Life Insurance Co. Ltd.6. SBI Life Insurance Co. Ltd.7. Star Union Dai-ichi Life Insurance Co. Ltd.



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Phased WITHDRAWLOn attaining Normal Retirement age of 60 years, subscriber is required to invest minimum 40%

of his/her accumulated savings (pension wealth) to purchase a life annuity from any IRDA-regulated life insurance company and remaining pension wealth can be withdrawn as lump sumor in phased manner.

Lump sum / Phased withdrawal can be considered if -

If market is high, subscriber can withdraw60% lump sum on attaining 60 years of age toavail better returns.

If market is low, subscriber can opt for phasedwithdrawal and can stay invested in NPS till 70years of age and withdraw Min 10% every year Any amount lying to the credit at age of 70 years shouldbe withdrawn compulsorily as lump sum



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Return Illustration - @ 7% Growth*

What do youpay - MonthlyContribution(Rs.)

How long you pay - Investment Period

10 years 20 years 30 years 40 years What you get - Monthly Pension Returns (in Rs.)

500 423 1,317 3,073 6,5291,000 847 2,633 6,147 13,059

2,000 1,694 5,266 12,294 26,118

* Benefits are variable with returns based on future performance of the Investment Fundsmanaged by PFMs. For the purpose of this illustration, we have used 7% as growth rateof investment return in the calculations. Other Assumption Return from any of the asset allocation E, C, and G is taken as 7% both during investment andretirement period Subscriber would annuitize 100% pension corpus on retirement Subscriber would receive monthly pension returns as per Life Annuity plan



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Subscribers POP

SP DetailsSubscribers

Account Details

Net Asset Value andUnit details on day oftransaction

Name of Schemeand % allocation

Date on which anytransaction(Contributionpayment, chargededuction, unitallocation etc.)tales place

Subscribers

contribution in lastfinancial year



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NPS - USPs



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NPS -Stakeholders

Unbundled Architecture, where each function is performed by different entity.

NPS provides an opportunity for subscribers, to be serviced by intermediaries which are renowned intheir area, that too at low cost

PFRDA, a Prudent Regulator created by Govt. of India.

Central Record Keeping lies with NSDL which is associated in variousNational level projects for recordkeeping functions.

Renowned Financial Institutions covering Public/Private Sector Banks,NBFCs, Broking house acting as POP .

Funds are managed by Funds Managers from Public & Private sector withproven track record.

Bank of India , a nationalized bank with wide spread across India, functionsas Trustee Bank .

Stock Holding Corporation of India Ltd , who introduced Custodial Services

in India, functions as custodian for NPS. Click Here For More Details


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time to investment in new pension systemnew pension system

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