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iob_bank_nps_national_pension_system

Last Updated:12/02/2026
NPS National Pension System

PoP (Point of Presence) Registration Number: 52092018

National Pension System:

NPS was introduced by the Central Government to help the individuals have income in the form of pension to take care of their retirement needs.

The Pension Fund Regulatory and Development Authority (PFRDA) regulates and administers NPS under the PFRDA Act, 2013.

NPS is a market-linked defined contribution scheme that helps subscriber save for their retirement. The scheme is simple, voluntary, portable and flexible. It allows to plan for a financially secure retirement with systematic savings in a planned way.

Eligibility: 18 - 85 years

Type of Accounts:

NPS scheme is structured into two tiers.

i. Tier-I account: Permanent retirement account into which the regular contributions made by the subscriber and/or their employer and are credited and invested as per the scheme/fund manager chosen by subscriber.

ii. Tier-II account: Voluntary / optional withdrawable account which is allowed only subscriber has an active Tier I account. The withdrawals are permitted from this account as and when subscriber require.

Asset Classes:

Subscriber must choose asset classes as well Pension Fund Manager (PFM) along with the percentage allocation to be done in each scheme. There are four asset classes from which the allocation is to be specified under a single PFM.

i. E - Equity

ii. C - Corporate Debt

iii. G - Government Bonds

iv. A - Alternative Investment Funds

While choosing the asset class, subscribers must note that

  1. Percentage contribution value cannot exceed 5% for Alternative Investment Funds
  2. The total allocation across E, C, G and A asset classes must be equal to 100%.
  3. For Tier-II, subscriber can allocate 100% to Equity.
  4. For Tier-I, subscriber can allocate 75% to Equity.

 

Investment Choices:

Active Choice: Under Active Choice, subscriber can plan and choose on how contribution is to be invested. Subscriber can choose the PFM, the scheme(s) as well as the percentage allocation in the asset classes.

Asset Class

Maximum allocation of investment in the asset class

E

Upto 75%

C

Upto 100%

G

Upto 100%

A

Upto 5%

Note: Investment in Asset Class A is available only for NPS Tier 1 account.

 

Auto Choice:

NPS offers an easy option for subscriber to invest in a Life-cycle fund in which the proportion of funds invested across three asset classes that are determined by a pre-defined portfolio and would change as per subscriber's age.

As age increases, subscriber's exposure to Equity and Corporate Debt tends to decrease under Auto Choice. Depending upon subscriber risk appetite, there are four different options available within 'Auto Choice' - Aggressive, Low, Moderate and High.

  1. Life Cycle 75 - High (15E / 55 Y)
  2. Life Cycle 50 - Moderate (10E / 55 Y)
  3. Life Cycle 25 - Low (5E / 55 Y)
  4. Life Cycle - Aggressive (35E / 55 Y)

Exit from NPS:

Partial Withdrawal

Premature Withdrawal

Normal Withdrawal

i. Before 60 years age / superannuation (whichever is later)

Frequency: 4 times

Interval: 4 years between two withdrawals

ii. Post 60 years age / superannuation (whichever is later)

Frequency: NA

Interval: 3 years between two withdrawals

a) Corpus ≤ ₹ 5 lakh:

100% lumpsum or SLW or SUR

(or)

Up to 20% lumpsum & Atleast 80% annuity

b) Corpus > ₹ 5 lakh:

Up to 20% lumpsum & At least 80% annuity

a) Corpus ≤ ₹8 lakh:

100% lumpsum or Systematic Lumpsum Withdrawal (SLW) or Systematic Unit Redemption (SUR)

(or)

Up to 80% lumpsum & Atleast 20% annuity

 

b) Corpus > ₹ 8 lakh ≤ ₹ 12 lakh:

Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity.

(or)

Up to 80% lumpsum & Atleast 20% annuity

 

c) Corpus > ₹ 12 lakh:

Up to 80% lumpsum & Atleast 20% annuity

 

Charge Structure under NPS:

The following charges will be applicable for Common Schemes under both the All Citizen and Corporate Model, including NPS Vatsalya and NPS Lite:

Particulars

Charges

First Year of subscribers onboarding

Rs. 200/- per new account plus applicable taxes

Second Year onwards

0.2% p.a. of the AUM (Assets Under Management) (subject to minimum of Rs.30/-) pro-rata on quarterly basis, in accounts other than Dormant accounts. This shall be applicable to all existing accounts as well.

Subscribers onboarded through e-NPS and making subsequent contributions through e- NPS or D-Remit

No Charges

Subscribers onboarded through a POP and making subsequent contributions through e-NPS or D-Remit

0.2% p.a. of the AUM (Assets Under Management) (subject to minimum of Rs.30/-) pro-rata on quarterly basis, in accounts other than Dormant accounts. This shall be applicable to all existing accounts as well.

All Non-financial transactions

Rs. 30/-

Processing of Exit/Withdrawal

0.125% of corpus subject to Max Rs. 500/-

Notes:

i. Method of deduction shall be through cancellation of units by Central Recordkeeping Agencies (CRA).

ii. GST or other taxes as applicable, shall be additional.

iii. The term " p.a." shall mean a period comprising of four (04) consecutive quarters and shall not be construed to or to be aligned with, a financial year or a calendar year.

iv. Accordingly, charges shall be levied at 0.05% of AUM on the last day of quarter for Common Schemes of NPS (All Citizen and Corporate Model), including NPS Vatsalya, and 0.025% of AUM on the last day of quarter for CPSE employees.

v. Dormant Account will not be charged. Dormant account is defined as such account where subsequent to a contribution in a quarter, there is no contribution for four consecutive quarters as identified at the end of each quarter.