Shifting NPS Account Sectors in NPS, Form ISS: NPS is considered a pension system meant to provide financial security to a person after his/her retirement. An employee can maintain only one NPS account on his/her entire service career irrespective of change in employers. Permanent Retirement Account Number is a unique identification number that is allotted to each NPS subscriber. PRAN or the NPS account is considered to be portable and can be moved if the employee is shifting from the government sector to the private sector. A person can have only one PRAN, just like he/she has only one PAN. This PRAN can be used in any sector, including government and private.
Changing the employer doesn’t affect the PRAN of the employees; thus, they can use the old account even if they are joining a new job. They can shift from one sector to another easily, from one state government service to another state government service, from one central government service to corporate and vice versa, etc. So in case an employee has opened his/her PRAN account as a government employee and quits his/her job, he /she can still use this account under all citizen’s model by contributing a total of 1000/- in order to keep the account active.
Various Sectors or Models of NPS
Let’s discuss the different models or sectors of NPS. Currently, NPS and APY together have more than one crore subscribers with a total AUM (Asset Under Management) of more than 1 lakh crore.
Government Sector
- Central Government: On 1 Jan 2004, the Government released a statement making NPS compulsory for government employees (except armed forces). The statement states that every government employee is bound to make a contribution to the National Pension Scheme.
- State Government: NPS is applicable for all State Government employees, State Autonomous Bodies who have joined their government services after the date of notification released by their respective State Governments. Gradually, all State Governments started considering the NPS.
Corporate Sector
PFRDA (Pension Fund Regulatory Authority) launched the National Pension Scheme in December 2011. NPS is just like a Provident Fund as it is meant for securing the future of the employees. The biggest advantage of NPS is the tax benefit scheme which allows up to 10% deduction on the Basic Pay+ DA of the employer’s contribution on behalf of the employee. Even the employer can avail of tax benefit from NPS by showing this contribution as an expense in the profit and loss account. The NPS return rate for the corporate sector for the 1st year is around 13.59%.
All Citizens Sector
NPS is available for every citizen of India from 1 May 2009 on a voluntary basis. All Indian citizens who come between the age of 18 and 60 years as of the date of submission of application to the point of Presence are eligible to be a subscriber of NPS.
NPS Lite or APY or UOS( Unorganized sector)
NPS Lite or The Swavalamban Scheme was launched in order to provide retirement benefits to the unorganized sector. Under this scheme, the Government of India pledges to contribute 1000 per year; this will continue for five years for those who have a Swavalamban account, provided that the contribution states between 1000/- and 12000/- per year. The people who are forming these low-income groups are represented through an organization known as aggregators.
What is a Nodal Officer of NPS?
PFRDA has appointed NSDL (National Securities Depository Limited)Â as the Central Record Keeping Agency (CRA) and entitled them with the responsibility to maintain the records of contribution and its deployment in different pension fund schemes that the employees have applied for. The records of each employee’s contribution will be recorded in an account which is known as Permanent Retirement Account. This account can be identified using PRAN.
The nodal office is responsible for interacting with the CRA on behalf of the NPS subscriber. Government offices like DTO and DDO act as nodal offices. CRA-FC is considered a facilitation center appointed by the CRA and is responsible for facilitating nodal offices to submit the application for alloting PRAN to different employees and submitting an application for change in a signature subscriber’s photograph.
- Nodal offices which come under the Central Government include the Principal Accounts Office (PrAO), Pay and Accounts Office (PAO), and Drawing & Disbursing Office (DDO).
- Nodal offices which come under the State Government include the Directorate of Treasuries and Accounts (DTA), District Treasury Offices (DTO), and Drawing & Disbursing Office (DDO).
Shifting NPS Using Form ISS
An NPS subscriber has the right to shift from one sector to another sector or from one office to another office with the same PRAN. When one is planning to shift his/her NPS, he/she needs to submit ISS Form in order to begin the shifting process. The steps that are involved in submitting this form is as follows:
- One has to fill in the details regarding the shift he/she is going to make. Whether the shift is from the state government to state government or government to corporate had to be mentioned in the form.
- The appropriate documents must get attached to the form.
- The form with the required documents has to be submitted to the target POP-SP.
- They will provide the subscriber with a stamped acknowledgment.
- Once the details are verified by the authorities, the change will get notified to the subscriber.
Before going forward with the shifting, please note
- The PRAN of the subscriber should be active.
- Details such as PRAN number, employer information, and salary information must be recorded in a similar way as it was recorded in NPS.
Shifting NPS Form ISS (Inter Sector Shift)
The details that are to be given in the ISS Form are as follows:
- Name and address of the subscriber, details of the PRAN, details of the existing and new POSP.
- One must ensure that the PRAN details are correct, and he/she must attach a copy of the PRAN card also.
- One must provide the details of the DDO/POP-SP to which the PRAN is associated.
- The subscriber must also provide the details of the DDO/POP-SP to which the PRAN will get associated once the shifting is done.
- The sector section for ‘Existing PRAN association’ and ‘Target PRAN association’ is considered to be the same when the subscriber is meant to shift from one state government to another state government.
Subscriber from every sector is required to fill up the declaration part in the ISS form. After successful verification of the change request form, the POP-SP accepts the declaration form, after which they will issue a 17 digit receipt number as an acknowledgment to the subscriber.
The nomenclature of the receipt is as follows:
- First, 2 digits starting from the left – Type of request (19 for Subscriber shifting)
- Next 7 digits – Registration Number of POP-SP e.g., 6000002
- Next 8 digits – Running sequence number eg.00000001
- For Example, 17 digit receipt number will be “19600000200000001
It is the duty of the POP-SP to hand over the acknowledgment receipt to the subscriber to show that they have accepted their request. The POP-SP must affix the seal, as well as the user, must sign the acknowledgment before making it available to the subscriber.