1 Inception of NPS Government of India introduced

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Inception of NPS � � Government of India introduced NPS from 1. 1. 2004 to all new employees of Central Government Service except to Armed Forces. Government of India rolled out NPS for all citizens of India from 1 st May, 2009. As a social security concept. Role of India Post in NPS � � India Post is one of the Point of Presence (POP). All Head Post Offices in Karnataka are now to be Point of Presence – Service Providers for NPS(POP-SP). 2

NPS Scheme Governing Body � � � Government of India, Ministry of Finance established the Pension Fund Regulatory and Development Authority. NPS Trust is created under Indian Trust Act 1882, by PFRDA (Pension Fund Regulatory and Development Authority) to take care of the funds under NPS. The scheme is operated by the National Securities & Depository Ltd (NSDL) through Central Recordkeeping Agency (CRA) 3

What is NPS Scheme? � � � NPS is a voluntary, simple, regulated portable and flexible pension scheme. The NPS is a pension plan where you can invest during your working years and withdraw when you retire with monthly pension. NPS is voluntary, open to every citizen of India. All citizen can choose the amount to set aside and save every year. NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS trust. NPS scheme is flexible , you can choose your own investment option and Pension fund and see your money grow. NPS scheme is portable, Subscriber can operate NPS account any where in the country. 4

Why NPS Scheme? • Income security for retired people. • NPS is simple, you can open NPS account with any POP-SP ( Post Office) and get PRAN. • Highly effective mechanism of fund management and cost effective. – World’s lowest operation cost of Pension Fund Manager @ 0. 0009% • NPS is regulated by Pension Fund Regulatory and Development Authority (PFRDA) is a Government authority under MOF. • Regular audit in all PFM & Highly accountable scheme. • Nomination facility available. • Government of India deposits Rs. 1000/- in all new accounts opened during the financial year 2010 -2011. • Tax Benefit would be applicable as per the Income Tax Act, 1961 as 2. 9. 5 amended from time to time.

Types of accounts Tier 1 Nonwithdrawal account. Builds retirement corpus. Minimum Rs. 500/- per transaction Rs. 6000/- per Default fee financial year. Rs. 100/- per Minimum financial year number of transaction is 1 per year 2. 9. 6

Types of accounts- Tier 2 : A voluntary savings facility which provides liquidity to subscribers. Its not a pension account. Minimum - Rs. 1000/- per contribution Withdrawal permitted any time. Net Asset Value added to fund 2. 9.

Contribution details • Min amount per contribution: Rs 500 • Min contribution per year: Rs 6000 • Min number of contributions per year: 1 • No max contribution • No periodicity prescribed • Contribute through cash, local cheque or DD. Outstation cheques not accepted • Contribution can be made at any POP_SP. Contributions made in POs will be transmitted to the CRA through the e. Payment central server 2. 9. 8

Where Invested? In Equity (E), Government Security (G) and Corporate Bonds (C) as per the subscribers choice. � Investments in equity only in those listed in National Stock Exchange or Mumbai Stock Exchange. � 60% of the corpus fund from (Tier I) can be withdrawal at the age of 60 years and 40% invested with Pension Provider Company at the choice of the subscriber. � 9

Choices for NPS Subscriber Six different Pension Managers viz. , ICICI Prudential Pension Funds Management Co Ltd, IDFC Pension Fund Mangement Co Ltd. , Kotak Mahindra Pension Fund Limited, Reliance Capital Pension Fund Limited, SBI Pension Funds Pvt Ltd. , UTI Retirement Solutions Ltd. � Options for deciding the investment plan in “Active choice” � Can also decide to do no option on investment plan by leaving it to “Auto choice” � 10

Who can join NPS? Citizens of India (Resident or Non Resident) Age Limit : Min-18 years and Max- 55 years (As on date of submission of application to POP_SP) 11

Insolvent person Individual of unsound mind Who cannot join NPS? Pre-existing account holders under NPS Person under 18 years of age ( Minor) 2. 9. 12

KYC Norms • Know Your Customer Norms (KYC) mandatory. • KYC Documents are identity Proof, Address Proof and age proof. ü Passport or other govt. issued document reflecting current or permanent address can be accepted as address proof & identity proof ü Bank statement/electricity bills (for address proof) should not be dated beyond last six months from the date of application. ü In case of non IRA compliant applicant, identity proof & address proof has to be taken in the form of certificate from head of office only 2. 9. 13

Mandatory Guidelines for NRI Should have account with a bank in India to be eligible for joining NPS Contributions made by NRI would be subject to regulatory requirements prescribe by RBI from time to time. 2. 9. 14

Activities involved in providing the service Grievance handling (No Charges) Subscriber Registration Initial contribution Processing Subscriber Servicing Regular Subscriber Contribution 2. 9. 15

…Forms Composite Application Form(CAF) UOS-S 1 Annexure NCIS Annexure S 1 • Subscriber applying fresh Tier-I and Tier-II account • With all applications • Application for Allotment of PRAN – with S 1 & S 11 only 2. 9. 16

Forms Form UOS-S 10 (For Tier-II activation) Form UOS-S 11 (For Tier-II activation) UOS-SH 1 • Subscriber who has been registered for Tier-I and issued a PRAN card • Subscriber who has been registered for Tier-I and not issued a PRAN card • When PRAN is required in Hindi 2. 9. 17

Subscriber’s Registration– options for activation • For all Indian citizens (except those Government servants appointed after 01 Jan 2004 and existing Tier I & II NPS subscribers) Tier I • For all Indian citizens (except those Government servants appointed after 01 Jan 2004 and existing NPS subscribers) Tier II • For Tier I subscribers. (Govt servants appointed after 01 Jan 2004 are eligible only for Tier II activation ) 2. 9. 18

Permanent Retirement Account Number (PRAN) A unique number allotted to NPS Subscriber Allotted by CRA Common to both Tier I & Tier II One Subscriber -one PRAN 2. 9. 19

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PFRDA POP Service Requests &Transaction Data NPS Trustee Bank CRA (NSDL) POP-SP NAV PFMs Re orm n. F tio tra gis Subscriber N A PR Kit CRA-FC NPSCAN: NPS Contribution Accounting Network Information Flow 22 Funds Flow

Instructions for filling up of forms for Subscriber Registration Correct forms are to be used Presented at Post office counter MUST FILLED IN WITH BLACK INK ONLY WRITTEN IN BOLD LETTERS Details should be furnished correctly A colour photograph of size 3. 5 X 2. 5 cm Application is duly signed Address is complete with pin code All mandatory data fields(*Marked) correctly filled by the applicant Applicant must be within the Min (18) and Max (55) permissible age, on the date of application Date of birth to be validated by valid documentary proof. The signature should be inside the rectangle provided in the form KYC documents (proof of identity & proof of address) to be checked Applicant should sign self-declaration that he/ she is not a pre-existing member of the NPS 2. 9. 23

Check list for Subscriber Registration 1. Subscriber’s Colour Photo of size 3. 5 X 2. 5 cm 2. Subscriber’s Signature/Thumb impression (left thumb impression for Male and Right thumb impression for female) 3. Subscriber’s personal Details 1. 2. 3. 4. 5. First name Gender Father’s First Name Date of Birth Complete Present and Permanent address with PIN code. 2. 9. 24

…Check list for Subscriber Registration 4. Subscriber Scheme Preference 1. PFM Selection (only one) 2. Asset Allocation (in case of Active Choice) a. Total should be equal to 100% b. Equity should not exceed 50% 5. KYC Documents a. Identity Proof b. Address Proof c. Date of Birth Proof 2. 9. 25

Tier II Activation � Tier II Activation will be accepted at Post Office. � Subscriber Bank details (ECS) are mandatory. � UOS-s 10 application, One cancelled cheque leaf & PRAN copy should be given. � Service charge @0. 25% of contribution subject to min Rs. 20/- and max Rs. 25000/- plus applicable service tax and EC should be accepted. * � Initial contribution Rs. 1000/- is must. � Post offices(POP-SP) scan the Tier-II activation form and sent through email/Fax to NPS nodal office for activation. � *vide dop memo Fno. 3 -16/09 NPS(p) Part II dt. 2. 2. 12 26

Subscriber servicing Changes allowed Documents required Name Supporting documents + PRAN card copy Address Supporting documents + PRAN card copy Phone/mobile no. /email ID No document required Subscriber bank details Supporting documents +copy of PRAN card if IRA compliant, in case of Tier-II, copy of a cancelled cheque Preference for value added services, like email alerts, SMS alerts No document required Change in nomination details Copy of PRAN card Employment category No document required 2. 9. 27

Subscriber servicing ü PO to accept 1. Switch request for change in PFM/or investment option for Tier-I and Tier-II 2. Withdrawal request 3. Print Subscriber’s account statement 4. Re-issue of I-PIN/T-PIN/PRAN card ü PO to collect Service charge @0. 25% of contribution subject to min Rs. 20/- and max Rs. 25000/- plus applicable service tax and EC* for these services *vide dop memo Fno. 3 -16/09 NPS(p) Part II dt. 2. 2. 12 2. 9. 28

Grievance handling • Receiving of grievances against any PO or any other NPS intermediary in the format prescribed and forward them to Nodal PO for uploading in Central Grievance Management System(CGMS) • The grievance shall be resolved within 7 days 2. 9. 29

Additional Information –Details Cost of Operation Intermediary CRA POP Trustee Bank Custodian (on asset value) PFM Charges Charge head Service Charges Method of deduction PRA Opening charges Rs. 50/- Annual PRA Maintenance cost per account Rs. 350/- Charge per transaction Rs. 10/- Initial subscription regn & contribution upload Rs. 40/- Any subsequent transaction Rs. 20/- Per transaction emanating from RBI location Rs. zero Per transaction emanating from non-RBI location Rs. 15 Asset Servicing charges Investment Management Fee 0. 0075% p. a. for electronic segment & 0. 05% for physical segment 0. 0009% p. a. Through cancellation of units To be collected upfront Through NAV deduction 2. 9. 30

NPS V/s other schemes Details * sources: economic times NPS Investment/year 1, 000 Unit linked MF Pension pension Plans 1, 00, 000 Charges/yr (Initial) 925. 00 13, 200 1250 Charges/yr (5 -10 yrs) 388. 00 9, 000 1250 Charges/yr (11 -15 yrs) 455. 00 6, 000 1250 Charges/yr (16+ yrs) 455. 00 00 1250 PFM Charges 0. 0009 % 1. 25% Assume CAGR 10% 10% Maturity after 30 yrs 1. 80 cr 1. 39 cr Pension corpus (Minimum) 40% 67% 0 -100% 31

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Please note ØThe scheme is subject to market risks ØAdvise the investor to read the offer document carefully before investing ØNo fixed / guaranteed returns ØThe investments will be calculated on NAV basis. ØGovt. Of India will co contribute Rs. 1000/- to each NPS account 2. 9. 33

Contact details : India Post NPS Nodal office, PTC, Mysore: Phone: 0821+2441010 Fax : 0821+2441010 Email : nps@indiapost. gov. in CRA , Mumbai: National Securities Depository Limited 4 thfloor, 'A’Wing, Trade World, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400013. Tel: (022)24994200(60 lines) Fax: (022)24952594/24994974 Tollfreenumber: 1800222080 email : info. cra@nsdl. co. in CRA web site www. npscra. nsdl. co. in 2. 9. 34