Rule 10 — NPS Rules
Original Rule Text
10. Features of NPS
(a) Portable – Each employee is identified by a unique number and has a separate Permanent Retirement Account which is portable i.e., will remain same even if an employee gets transferred to any other office.
(b) Transparent – NPS is transparent and cost effective system wherein the pension contributions are invested in the pension fund schemes and the employee will be able to know the value of the investment on day to day basis.
(c) Simple – All the subscriber has to do is to open an account with his/ her Nodal Office and get a PRAN.
(d) Regulated - NPS is regulated by PFRDA with transparent investment norms & regular monitoring and performance review of fund managers by NPS Trust
What This Means
NPS has four defining features that make it different from the old pension system. First, it is portable: each subscriber gets a unique Permanent Retirement Account Number (PRAN) that stays with them no matter which office or department they are posted to. There is no need to open a new account or transfer funds when transferred — the same PRAN follows the employee throughout their career.
Second, the system is transparent and cost-effective. The employee can check the value of their pension fund online on any working day, just like a bank or mutual fund account. Third, it is simple to operate — the subscriber just needs to open an account through their Nodal Office and obtain a PRAN; day-to-day operations are handled by the system. Fourth, NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), which sets investment guidelines, monitors fund managers, and ensures the system is run in the interest of subscribers.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Portable: PRAN stays the same regardless of transfers across offices, departments, or locations.
- 2Transparent: Subscribers can view their fund value on any day via online access.
- 3Cost-effective: Administrative charges are kept low compared to conventional pension or insurance products.
- 4Simple: Only one action needed — open account through Nodal Office and get PRAN.
- 5Regulated by PFRDA with clearly defined investment norms and performance monitoring of fund managers.
Practical Example
Sunita Devi, a Section Officer in the Ministry of Agriculture in Delhi, is transferred to the Regional Office in Pune. Under the old system, her pension file would need to be physically transferred and updated. Under NPS, her 12-digit PRAN remains unchanged. She simply informs the new Nodal Office, and her monthly contributions continue seamlessly into the same PRAN. She can log on to the CRA website at any time and see exactly how much her pension fund has grown — broken down by the amounts in equity and fixed-income instruments.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.