Terms and conditions for sms and email facility in nps

Terms and Conditions for SMS and E-Mail facility


In these Terms and Conditions, the following terms shall have the following meanings:



Alert/Facility
Means the (services of providing the ) customized messages with respect to specific events/transactions relating to a subscriber’s Account sent as Short Messaging Service (“SMS”) over Mobile phone or email to the email account of the subscriber;



Subscriber
Means the person who holds a permanent Retirement Account Number (PRAN) opened by CRA and who is also IRA compliant;



CSP
Means the cellular service provider through whom the investor receives the mobile services.



CRA
Means NSDL who have been appointed as Central Recordkeeping Agency by PFRDA.



Availability of the Service


CRA at its sole discretion may discontinue the facility at any time by providing a prior intimation through its website or any other medium of communication. CRA may at its discretion extend the facility to investors who register mobile numbers originating outside India.
The Facility would be generated by CRA and will be sent to the subscriber on the mobile number or E-mail Address provided by the subscriber. Further, the time and the completeness of the Alerts content and delivery would be entirely based on the service availability of the service provider and its connectivity with other CSPs or the mail server availability of the respective websites. The Alerts are dependent on various factors including connectivity and therefore, CRA cannot assure final and timely delivery of the Alerts.

The Subscriber will be responsible for the security and confidentiality of his/her Mobile Phone/email account to be used for this Facility.
Process


This Facility provides information to investors over mobile phones and email ids for PRAN getting generated and the units getting allocated in Tier I and Tier II of the account, a day after the units get credited. These Alerts will be sent to those subscribers who have provided their mobile numbers and /or email ids to their nodal offices (like PAOs/DTOs/POPs etc.) while filling a PRAN application form.

The Subscriber is duty bound to acquaint himself/herself with the detailed process for using the facility and interpreting the Alerts for which NSDL is not responsible for any error/omissions by the subscriber.

The subscriber acknowledges that this facility will be implemented in a phased manner and CRA may at later stages or when feasible, add more features. CRA may, at its discretion, from time to time change the features of any Alert. The subscriber will be solely responsible for keeping himself/ herself updated of the available Alerts, which shall, on best-effort basis, be notified by CRA through its website or any other medium of communication.
Receiving the information through SMS and Emil


The subscriber is solely responsible for intimating in writing to his/ her nodal office/POP any change in his /her mobile phone number and /or email id. CRA will send the alerts only to the numbers/email id recorded in it system.

The subscriber acknowledges that to receive Alerts, his/her mobile phone must be in an ‘on’ mode(reachable) as well as well as the email id must be ‘active’. If his/her mobile is kept ‘off’ for a specific period from the time of delivery of an Alert by CRA or the email account is no more in active State , that particular information may not be received by the subscriber.

The subscriber acknowledges that the facility is dependent on the infrastructure, connectivity and services provided by the CSPs /or the e-mail service provider within India. The subscriber accepts that timeliness, accuracy and readability of information sent by CRA will depend on factors affecting the CSPs and other service providers. CRA shall not be held liable for non-delivery or delayed delivery of Alerts, error, loss or distortion in transmission of information to the subscriber.

CRA will endeavor to provide the facility on a best effort basis and the subscriber shall not hold CRA responsible/liable for non-availability of the facility or non performance by any CSPs or other service providers or any loss or damage caused to the subscriber as a result of use of the facility (including relaying on the information for his/her investment or business or any other purposes) for causes which are attributable to / and are beyond the control of CRA. CRA shall not be held liable in any manner to the subscriber in connection with the use of the facility.

The subscriber accepts that each Alert may contain certain account information relating to the subscriber. The subscriber authorizes CRA to send any other account related information, though not specifically requested, if CRA deems that the same is relevant.



Withdrawal or Termination



CRA may, in it s discretion, withdraw temporarily or terminate the facility, either wholly or in part, at any time. CRA may suspend temporarily the facility at any time during which any maintenance work or repair is required to be carried out or incase of any emergency or for security reasons, which require the temporary suspension of the facility.

Notwithstanding the terms laid down in clause above, either the investor or CRA may, for any reason whatsoever, terminate this facility at any time. In case the subscriber wishes to terminate this facility, he/she will have to intimate his/her PAO/DTO/POP accordingly.



Fees


At present, CRA is levying no charge for this facility on the subscriber/PAO/DTO/POP. The subscriber shall be liable for payment of airtime or other charges, which may be levied by the CSPs in connection with the receiving of the information. As per the terms and conditions between the CSPs and subscriber, and CRA is in no way concerned with the same.




Disclaimer

This Facility is only additional information for the investors and is not in lieu of the Transaction statement required to be provided by the CRA to its clients on a yearly basis.

CRA shall be not be concerned with any dispute that may arise between the investor and his/her CSP and makes no representation or gives no warranty with respect to the quality of the service provided by the CSP or guarantee for timely delivery or accuracy of the contents of each Alerts.

The Subscriber shall verify the transactions and the balances in his/her account from his/her nodal office and not rely solely on Alerts for any purpose.

CRA will not be liable for any delay or inability of CRA to send the Alert or for loss of any information in the Alerts in transmission.

Liability


CRA shall not be liable for any looses, claims and damages arising from negligence, fraud, collusion or violation of the terms here in on the part of the investor and/or a third party.

Incentive increase to PoPs to boost NPS

Interim regulator PFRDA has decided to enhance incentives to distributors from Rs 50 to Rs 150 for each subscriber for the current financial year, a move aimed at popularising the citizen pension plan, which has received lukewarm response. 

"With a view to boost the Points of Presence (PoPs) efforts to enroll more subscribers in NPS, the PFRDA has decided to enhance, with immediate effect, the monetary incentive for subscriber acquisition from Rs 50 to Rs 150 for the current financial year," Pension Fund Regulatory and Development Authority (PFRDA) said in a statement. 

Currently, there are 35 PoPs, including major banks likeState Bank of India and ICICI Bank , which act like contact and collection points for customers wanting to be part of New Pension System (NPS). 

A low incentive to PoPs has been viewed as one of the reasons for the lukewarm response of the NPS. 

PFRDA further said that the incentive is meant to help PoPs in capacity building for promotion of NPS and redouble their efforts to popularise NPS and bring a large number of subscribers to the NPS. 

Initially, the government launched the New Pension System for central government employees joining service from January 1, 2004, but it was extended to all citizens from May 1, 2009. 

However, the citizen pension scheme received a lukewarm response and only around 30,000 subscribers joined the scheme in 17 months. 

In August, PFRDA had set up a committee headed by former SEBI chairman G N Bajpai to overhaul the structure of pension scheme. 

The committee is considering if there is a need to alter the present incentive structure of various stakeholders, and to suggest a viable economic incentive model. 

It is also examining whether it is desirable to have differentiated incentive structures for the government and non-government segments. The committee is likely to submit its report next month.

source: economictimes.indiatimes.com

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Issues With NPS - Interview with PFRDA Chairman

source: dnaindia.com

With 40 financial institutions deployed as points of presence (PoPs) and six fund managers, the New Pension Scheme (NPS) is yet to take off. Pension Fund Regulatory and Development Authority (PFRDA) chairman Yogesh Agarwal spells out to DNA the issues with the NPS and what is expected from the Bajpai committee report. Excerpts:


What are your expectations from the Bajpai committee?
I expect it to show us the way, as there is no stake holder in the whole business today. I think the Bajpai committee will be able to tell us whether pension fund managers should be treated as stake holders or should be given a bigger role. Apart from managing the funds, they should also have a role in marketing the product and make people aware of it. For this, they need to be given incentive and the fee structure needs to be changed. Only then will we see the number of players going up from the six we have now.
How many new fund managers will be appointed?
There is no ideal number. Anybody meeting the criteria laid will be appointed.
Is there any scope of changing the investment pattern for fund managers?
Investment pattern is not a big issue with us at present.
Will revising fee structure help NPS take off or does it also need a new marketing strategy?
There is no marketing strategy, new or old. In fact, the frame of the fee structure is necessary, as they have to be seen as linked. For marketing, you have to raise the fee structure, otherwise who will market at these rates. These two are inter-linked and cannot be seen separately. Fund managers have to be given a bigger role; currently they don’t have a role in marketing. In fact, nobody has a role in marketing. If fund managers are given the marketing role, the cost involved will have to be compensated. As the functions increase, the fee structure has to go up.
Can PoPs be used for marketing?
PoPs cannot be used to market, as they are distribution channel. Its like these are banks primarily and they have much better products to market. Whoever plays the role, will need to be incentivised. Right now, with the kind of fee structure, if they sell an insurance product or a mutual fund product, they get a larger pie. To sell a pension fund they get nothing.
What kind of marketing strategy will the pension fund managers adopt?

NPS Fee may be hiked

Source: sify.com/finance

Increase to be based on recommendations by Bajpai Panel, more players to be included.
There is good news for fund houses managing funds under the New Pension Scheme (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) on Tuesday indicated that the fee structure, both to brokers and distributers, could see an increase once the G N Bajpai panel submits its report by December-end. In addition, there could be an increase in the number of fund houses managing the corpus as well.
Speaking on the sidelines of a Federation of Indian Chambers of Commerce and Industries (FICCI) function on the pension funds management, PFRDA chairman Yogesh Agarwal told reporters, " If the fee structure is opened up further, it will have look at giving room for more fund managers."
The pension regulator had appointed six pension fund managers (PFMs) –  SBI Pension Funds, UTI Retirement Solutions, Reliance Capital Pension Funds, ICICI Prudential Pension Funds, Kotak Mahindra Pension Funds and IDFC Pension Funds Management Company – to manage the NPS corpus. These players were selected after a competitive bidding process.
The existing fund management charges are 0.0009 per cent of the asset under management, which is valid for three years. Even the distributors such as, point-of-presence participants are paid a flat charge of Rs 40 for opening the account and per transaction fee of Rs 20. Consequently, both fund houses and distributors have been unwilling to promote NPS aggressively. "In the present structure, this brings in revenues of Rs 100 in the first year to the POP and Rs 80 in the subsequent years," said Agarwal.
Agarwal also added that there were talks about reasonableness and adequacy of charges. Since PFMs are required to be distinct legal entities, separate from their sponsors, and therefore have to be financially self-sufficient to be long-term players.
Said a CEO of one of the top-five fund houses, "The present structure does not make this a profitable venture for mutual funds because we have to dedicate manpower." He said that the mutual fund industry is managing around Rs 3 lakh crore in short-term liquid funds.

NPS vs ULIP Pension Funds vs Mutual Fund Pension

comparison between the New pension scheme, Insurance Pension Plan (ULIP Based) and Mutual Fund Pension Plan.

NPS the cheaper and Tax Friendly Alternative:

	NPS	Insurance Plans (ULIP Based)	Mutual Fund Pension Plan
Investment amount per year	100000	100000	100000
Charges per Year (Initial Period)	925	13200	1250
Charges per year (5 Years to 10 years)	388	6000	1250
Charges per year (11 years to 15 years)	455	3000	1250
charges per year (16 years)	455	0	1250
Fund Management	0.0009 %	1.25 %	1.25 %
Age limit for annuity	60	Flexible	58
Assume CAGR	10 %	10%	10%
Maturity proceeds after 30 years	1.8 Crores	1.3 Crores	1.39 Crores
Lump sum (Max)	60 %	33%	0-100%
Pension Corpus (Min)	40%	67%	0-100%

 

NPS being the option with the lowest costs eats into the investments the least and hence delivers the highest returns.

 

The draft of the much awaited Direct Tax Code, which is expected to bring about a consolidation of the current tax laws and also effect some changes in the tax laws, has recently been made public.

 

With the drafts of the Direct Tax Code, there seems to be a decided push for making the NPS product more attractive to investors. The major change that the DTC will bring about in the retirement products scenario is that ULIPs will now also be taxed under the EET (Exempt-Exempt-Tax) Regime. This means that unlike in the current scenario, withdrawals from ULIPs will not be tax exempted. It has long been seen in the Indian investments market that the behavior of the retail investors is largely
guided by tax concerns. There is always a rush to invest in order to save on tax. ULIPs had an advantage over the NPS and mutual funds because it was taxed as EEE. This means that the withdrawal and is tax free too. Surely this is a major plus, but with the provisions in the new Direct Tax Code, the NPS will also be taxed in the EEE framework. This will invert the tax situation among retirement products with investment benefits.

NPS will be the only product to be taxed under EEE out of the three (Mutual Funds, ULIPs and NPS).

As a result, its major handicap will now be removed. The government has designed the NPS to benefit the investor to the maximum and the new taxation vis-a-vis the NPS will only add to the attractiveness of NPS.

Conclusion:NPS remains a very good product for its purpose and by aligning the distributors` interests with the PFMs would greatly help the NPS increase its strike rate. Re-iterating that NPS is a post-retirement safety tool,
it is a very effective tool that covers capital protection and also provides growth. With its lowest charges, it also is the cheapest way to get an exposure to the market. For the thousands and lakhs of employees in
the unorganized sector who have negligible or no post-retirement social security benefits, NPS is a boon.

More FAQ on New Pension Scheme

Who shall be responsible for protecting my interests as a NPS subscriber?A) The Pension Fund Regulatory and Development Authority, the regulator, will protect your interest.

What is the process for enrolling in NPS?A) Eligibility: 18-55 years of age. Upon registration, you will receive a permanent retirement account
number. Minimum annual contribution is Rs.6,000. The minimum number of instalments per year is
four. There is no upper limit on the contribution per instalment or on the number of instalments.

Would my personal information be confidential?A) Yes.

Under what circumstances can my account be closed before attaining retirement age?A) The account would be closed under following circumstances: death, account value reduces to zero and
change in citizenship status.

Can I exit before attaining the age of 60 years?A) Yes, provided you annuitise at least 80 percent of your pension corpus.

What if I do not exit the system at or before 70 years?A) In that case, on attaining 70 years, your account would be closed with the benefits transferred to you.

Can someone else make contributions on my behalf?A) Yes.

What would be the penalty in case I am unable to contribute the minimum annual
contribution?
A) You would have to bear a default penalty of Rs.100 per year of default and the account would become
dormant. In order to re-activate the account, pay the minimum contributions, along with penalty due. A
dormant account will be closed when the account value falls to zero.

Are there any investment returns guarantees?A) No. NPS is a defined contribution scheme and the benefits would depend upon the amounts
contributed and the investment growth up to the point of exit from NPS.

Will I be permitted to select more than one pension fund to manage my savings?A) You have to select only one fund. However, the regulator may allow the subscribers to choose more
than one fund in future.

What if I do not select any investment option?A) All your contributions would be channeled into a life-cycle fund.

What are the risks of investing in NPS?A) As with every investment, there is a degree of risk under NPS also. The value of your investment in NPS
may rise or fall.

I am 30 years old and would like to retire at 60. I want a pension of Rs.2,000 per month at
today's prices when I retire. How much do I need to contribute?A) You would need a pension wealth of Rs.319,000 (at today's prices) at the age of 60 to get a pension of
Rs.2,000 per month. To realise this, you would need to contribute approximately Rs.16,600 every year.

What will happen to my savings after I retire at 60?A) You will have to compulsorily invest a minimum of 40 percent of your pension wealth to purchase a life
annuity from an IRDA-regulated life insurer. The remaining pension can be withdrawn in lump sum or in
a phased manner.

What will happen to my savings if I decide to exit NPS before the age of 60?A) You would be required to invest at least 80 percent of your pension wealth to purchase a life annuity
from any IRDA-regulated life insurer. The remaining 20 percent may be withdrawn as a lump sum.

Will the annuity also provide for a family (survivor) pension?A) Yes, you will have an option of selecting an annuity which will pay a survivor pension to your spouse.

On my death, can my nominee continue to operate the account in my name?A) No, the balance standing to the subscriber's account may be transferred to the nominee's account after
following regulator KYC procedure.

Can I opt not to exit in case of disability?A) Yes.

Is the scheme tax free?
Long term savings have three stages: contribution, accumulation and withdrawal. The NPS was devised
when the government was planning to move all long term savings to a tax regime called exempt-exempt-
taxed (EET), standing for exempt at the time of contribution, exempt during the period when the
investment accumulates and taxed at the time of withdrawal. So, NPS comes under the tax regime EET.
However, the government could not muster the political courage to change the taxation regime of EET on
several saving schemes. So, the pension fund regulator has taken up with the finance ministry the need to
remove the asymmetry in tax treatment between the NPS and other schemes such as the PPF. In any case,
the amount spent on buying an annuity would be exempt from tax.