PFRDA has introduced the NPS Tier II Default Scheme exclusively for Government Sector subscribers. Check benefits
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the NPS Tier II Default Scheme exclusively for Government Sector subscribers. With this, the Government sector subscribers under NPS will be given an additional investment option of the Default Scheme along with the existing Scheme E/Scheme C/Scheme G investment options.
The NPS Tier II Default Scheme is designed to offer flexibility and convenience, aligning with the unique requirements of the Subscribers under the Government sector.
In a circular dated 22 September 2023, PFRDA said that the Government Sector Subscribers may continue with the Default Scheme under Tier II even after their shifting account to another sector.
Benefits of NPS Tier II Account
According to the circular, the following are some benefits of the NPS Tier II account:
Greater Flexibility: There is no mandatory annual contribution requirement for Tier II. The Subscriber can open the account by paying the minimum contribution. There is no maximum limit on the amount that can be contributed under Tier II.
Easy Withdrawals: With a Tier II account, subscribers can withdraw money at any time. It’s a convenient way to access the savings when subscribers may need them the most.
Seamless Transfer: If the subscriber wishes to move the funds to the primary pension account (Tier I), it can be done at any point. This feature ensures that the investments remain dynamic and adaptable to your changing needs.
No Minimum Balance: There is no requirement for maintaining a minimum balance in the NPS Tier II account. It offers the freedom to contribute as much or as little as one wants.
Separate Nomination Facility: The Subscribers can nominate beneficiaries for Tier II accounts separately if required.
Default Investment Scheme: The facility of the Default Investment Scheme of Tier I has been extended to Tier II accounts for Government Sector Subscribers. This facilitates the Subscribers to have access to a simplified default investment scheme, similar to Tier I, without the need for actively choosing a scheme of investment or PFs.
Easy to onboard: To join Tier II and opt for the Default Scheme, the Subscribers need to provide consent or a request to the CRA through the associated nodal office. The online & electronic modes of consent mode available on the CRA portal for the benefit of Subscribers.
How to activate NPS Tier II account?
PFRDA said that Government Sector Subscribers associated with Protean CRA can complete the account activation process on Protean e-NPS website. If any subscriber already has Tier II and wishes to opt for the default scheme in Tier II, one can do the same through the Scheme Preference Change option available in the login of the subscriber.
More than 700 subscribers have already opted for default scheme in Tier II, the regular said, adding, the facility of Tier II under default choice will also be made available soon for subscribers associated with KFin CRA.