National Pension System – Architecture

The National Pension System introduced by the Government of India is South Asia’s first Defined Contribution pension scheme with individual retirement accounts, product choices, professional fund management by competing fund managers and portability through centralized record keeping and administration.

  • Pension Fund Regulatory & Development authority (PFRDA) is the Regulator appointed by the Government of India to regulate and develop the pension sector.
  • Based in New Delhi
  • Regulator has created a Trust ( NPS Trust) to oversee and review the investment of the pension corpus.
  • Shri Ashvin Parekh is the chairman of the Trust.
  • Other trustees include:
    • Shri Atanu Sen
    • Shri Dinesh Kumar Mehrotra
    • Shri Sanjeev Chanana
    • Shri Radhakrishnan Nair

Government Sector – Central and State Government Employees

  • Following Pension Fund Managers have been appointed from a pool of competing Fund Managers to professionally manage the Pension Funds to manage the Central Govt. pension corpus under NPS:
    • SBI Pension Funds Pvt. Ltd.
    • LIC Pension Fund Ltd.
    • UTI Retirement Solutions Ltd.

 Private Sector – All Citizens and Corporate Entities

  • SBI Pension Funds P Ltd, Largest Pension Fund Manager out of 8.
  • Rs 86,000 crores of Asset under Management( AUM)  with over 38% Market Share as on February 28th,2018.
  • Manages 60% of Market share of AUMs under Private Sector.
  • Adjudged winner in the Pension Fund House Category for the year 2017 by Outlook Money. Awards by Outlook Money was adjudged to the Company for third consecutive year in a row.

NSDL and Karvy

  • Each subscriber will be given a unique PRAN number ( Permanent Retirement Account Number)
  • Complete portability is ensured.
  • NAV will be declared on a daily basis & will be put on NSDL and Karvy website.
  • Access to subscribers with User ID & PIN to view their contribution & NAV.
  • Grievance redressal system through online log in facility and escalation procedure for resolution.
  • All Fund Managers have A/C with Axis Bank.
  • DDOs/PAOs remit funds through Axis Bank Branches.
  • PoP-SPs will remit the funds to Axis Bank
  • Aggregation at Axis Bank.
  • Where Axis Bank branches are not available, SBI branches services availed.
  • They keep the custody of the assets.
  • All the assets are held in the name of the Trust.
  • The regulator appoints organizations to act as Point of Presence.
  • These Point of Presence have designated their identified branches to act as PoP-Service Provider (POP-SP), who will be acting as intermediary between the subscriber and NPS.
  • POP-SP shall perform the functions relating to NPS account opening, undertaking Know Your Customer (KYC) verification, receiving contributions & instructions from subscribers and transmission of the same to designated intermediaries.