National Pension System

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NPS has been introduced by Pension Fund Regulatory and Development Authority (PFRDA) to promote old age income security to all citizens of India including workers of the unorganized sector with effect from May 1, 2009. Union Bank has been authorized to collect funds under NPS from subscribers. All branches will work under one branch (which is called Point of Presence).

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Features of NPS:

A) Every individual subscriber will be issued a Permanent Retirement Account Number (PRAN) card and having 12 digit unique numbers.
B) Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is mandatory and the subscriber has option to opt for Tier II account opening and operation. The following are the salient features of these sub-accounts:
- Tier-I account: : A non-withdraw able retirement account which can be withdrawn only upon meeting the exit conditions prescribed under NPS.
- Tier-II account: : This is a voluntary savings facility available as an add-on to any Tier-1 account holder. Subscribers will be free to withdraw their savings from this account whenever they wish.

Minimum Annual Contribution Requirements under NPS:
Below is complete information on the minimum contribution requirements:

S. No.		Tier I	Tier II
1	Minimum Contribution at the time of account opening	Rs. 500	Rs. 1000
2	Minimum amount per contribution	Rs. 500	Rs. 250
3	Minimum total contribution in the year	Rs. 1000	Nil
4	Minimum frequency of contributions	1 per year	Nil

Fund Management Schemes:
The NPS offers two approaches to invest subscriber’s money:

Active choice –Here the individual would decide on the asset classes in which the contributed funds are to be invested and their percentages (Asset Class E-Equity(maximum of 50%), Asset Class C-Corporate Debt Securities, and Asset Class G-Government Securities)
Auto choice - Lifecycle Fund- This is the default option under NPS and wherein the management of investment of funds is done automatically based on the age profile of the subscriber.

Subscriber has control on the choice of investment made and the fund manager who manages the investments. Subscribers can switch over from one investment option to another or from one fund manager to another subject to certain regulatory constraints.

Pension Fund Managers (PFM’s):
The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund Managers (PFM’s). At present, Subscriber has option to select any one of the following 7 pension funds:
ICICI Prudential Pension Fund; LIC Pension Fund; Kotak Mahindra Pension Fund; SBI Pension Fund; UTI Retirement Solutions Pension Fund; LIC Pension Fund; HDFC Pension Management Company;

Tax Benefits:
The amount contributed is entitled for deduction from gross total income upto Rs.1.50 lakh (along with other prescribed investments) as per section 80C (as per the provisions of the Income Tax Act, 1961 as amended from time to time).
An additional deduction for the investment up to Rs 50000 in NPS (Tier 1 account) has been introduced under sub section 80 CCD (1B) for the year 2016-17. This is over and above the deductions of Rs 1.5 lakhs available under sec 80CCE

Partial Withdrawal:
Yes, allowed but not exceeding 25% of accumulated pension provided NPS account should be at least 10 years old. Maximum, 3 partial withdrawals allowed with a minimum gap of 5 years.

Other Facilities:

Account can be transferred from one POP to another.
Provision for Change in subscriber details, investment scheme, fund manager etc.
Printed statement available.

*These services are available on payment of prescribed fee.
Note: Power of Attorney in case of NRI Subscriber is not available.

Branches:: More than 3000 branches are authorised for NPS all over India. Branches list attached for reference. Customer can come to any authorised branch of Union Bank of India and open NPS account with us.

For any information/suggestion, please contact GBD, Mumbai at 022-22896377 and Delhi-011-23413686

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