NPS – Swavalamban

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NPS – Swavalamban

NPS was initially introduced for Government employees and was later extended to all citizens of India. Recognizing the need to provide pension to marginal income earners NPS Swavalamban scheme was introduced by PFRDA.

Eligibility: The subscriber should be Citizen of India, aged between 18 to 60 years and KYC compliant. In NPS Swavalamban, there is no fixed monthly contribution. Subscriber is free to manage both frequency and amount. Contributions can be made as per comfort and disposable income of subscriber. The scheme is maintained on Ultra low charge structure. There are no charges on registration and the subscriber can make 12 free contributions in a year. On enrollment to NPS Swavalamban, the subscriber will receive an Identity Card known as “PRAN CARD” with his/ her Photograph, Name and signature establishing membership of NPS Swavalamban Scheme. Newly joined subscribers will get 4 years co-contribution of `1,000 credit from GOI, subject to contributing minimum `1,000/- every year.

NPS Swavalamban accounts can be opened at 1,000 designated branches (NL CC) of State Bank of Hyderabad.

Swavalamban Benefit:The Government of India (GOI) has announced “Swavalamban Scheme” in 2010. According to the scheme, an amount of `1,000/- per annum will be co contributed by GOI to the NPS Swavalamban account of eligible subscribers from the year of registration upto 2016-17. Newly joined subscribers will get 4 years co-contribution of `1,000 credit from GOI.

Eligibility for Swavalamban Benefit:

  1. Minimum contribution of `1,000/- and maximum of `12,000/- per annum and
  2. Not covered by any other social security schemes under any of the following laws:
    1. Employees’ Provident Fund and Miscellaneous Provisions Act,1952
    2. The Coal Mines Provident Fund and Miscellaneous Provisions Act,1948
    3. The Seamen’s Provident Fund Act, 1966
    4. The Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955
    5. The Jammu and Kashmir Employees’ Provident Fund Act, 1961
      (Only self declaration is required).

Contribution:

Minimum initial contribution: `100/-
Minimum contribution: Minimum contribution of `1,000/- per annum is recommended to avail Swavalamban benefit and to ensure reasonable pension after retirement.
Maximum contribution: `12,000/- P.A.
Number of contributions per annum: minimum one.

Nomination: Available.
Normal Retirement of 60 years: The subscriber can withdraw 60% of amount of corpus on attaining 60 years. The subscriber would be required to invest minimum 40% of accumulated savings (pension wealth) to purchase annuity from any Annuity Service provider. At the time of exit, in case 40% of corpus is not sufficient to give pension of `1,000/- entire pension wealth should be invested for purchasing pension plan from Annuity Service Providers. In cases where minimum pension of `1,000/- is not met even after annutisation of entire corpus wealth, pension of less than `1,000/- would be paid by the Annuity Service Provider.

Pension Process: At present PFRDA has empanelled Seven IRDA approved Life Insurance companies for providing annuity services. The subscribers of NPS – Swavalamban will have a choice to select an Annuity Service Provider and annuity scheme offered by them at the time of exit from NPS – Swavalamban.