Eligibility

Who Can Subscribe to NPS under the Corporate Sector?

Eligible Employees:
Indian citizens including Resident Indians, NRIs (Non-Resident Indians), and OCIs (Overseas Citizens of India) who are employees of a corporate entity that has adopted the National Pension System (NPS) are eligible to enroll under the NPS Corporate Sector Model.

• Age eligibility: 18 to 70 years
• Mandatory: Completion of Know Your Customer (KYC) norms
• Registration must be done through the employer

Eligible Corporate Entities for NPS Registration
The following types of organizations can adopt NPS as a retirement benefit scheme for their employees:

1. Companies registered under the Companies Act, 2013
2. Co-operative societies registered under applicable state or central laws
3. Government-established bodies or entities under any Act of Parliament or State Legislature
4. Public Sector Enterprises (PSEs) or Government companies
5. Registered Partnership Firms
6. Limited Liability Partnerships (LLPs)
7. Proprietary Concerns
8. Trusts and Societies
9. Foreign companies registered under Sections 591–608 of the Companies Act, 1956, for their eligible Indian employees
10. Foreign diplomatic missions in India (e.g., Embassies, High Commissions, Consulates)
11. International organizations operating in India (e.g., UN, WHO, World Bank, ADB, IMF)

How to Register for NPS Corporate Sector Model?
To implement NPS for its employees, a corporate entity must register with the Central Recordkeeping Agency (CRA) under the NPS Corporate Sector Model. This is done by submitting a Corporate Registration Form (CHO) through a registered Point of Presence (PoP).
 

Benefits for Corporates and Employers

Organizations that adopt the National Pension System (NPS) under the Corporate Sector Model enjoy several strategic and financial advantages:

1. Voluntary and Flexible Implementation

• NPS can be offered alongside other retirement schemes such as Provident Fund (PF) and Superannuation Fund, enhancing employee retirement planning options.
• Corporates have the flexibility to define contribution structures:
• Equal contributions from employer and employee (e.g., 10% each)
• Unequal contributions (e.g., 10% by employee, 14% by employer)
• Contribution by only the employer or only the employee

2. Cost-Effective Retirement Management

• NPS eliminates the need for self-managed pension administration such as maintaining a trust, record-keeping, or annuity processing—making it a low-cost pension solution for employers.

3. Customizable Investment Options

• Employers can select a Pension Fund Manager (PFM) and asset allocation strategy on behalf of their employees. Alternatively, this decision can be left to individual employees.

4. Corporate Tax Benefits

• Employer contributions to NPS (up to 14% of salary, i.e., basic + DA) are treated as a business expense and can be claimed as a deduction under Section 36(1)(iv)(a) of the Income Tax Act, 1961.

Benefits for Employees

Employees enrolled in the NPS Corporate Sector Model enjoy a host of retirement and tax-related benefits:
  1. Lowest Cost Pension Scheme in India

• NPS offers one of the most cost-effective retirement solutions, with low fund management and administrative charges.

  2. Multiple Investment Choices

• Employees can choose from various Pension Fund Managers and flexible investment patterns to suit their risk profile.

  3. Full Transparency and 24/7 Online Access

• Subscribers can monitor their NPS account online anytime, with transparent NAV disclosures and real-time fund updates.

  4. Attractive Tax Benefits under Income Tax Act, 1961:

• Section 80CCD(1): Employee contributions eligible for deduction up to:
• 10% of salary (Basic + DA)
• 20% of Gross Income for self-employed

         (Subject to Rs. 1.5 lakh limit under Section 80CCE)

• Section 80CCD(1B): Additional tax deduction of Rs. 50,000
• Section 80CCD(2): Employer contributions deductible up to:
• 10% of salary for employees under Old Tax Regime
• 14% of salary for employees under New Tax Regime

  5. Portability and Flexibility

• NPS accounts are unique and portable, remaining active across jobs and geographic locations.
• Post-retirement options: Continue investing beyond superannuation and defer annuity or lump sum withdrawal up to the age of 75 years.

  6. Efficient Grievance Redressal

• Subscribers can raise and track complaints through the Centralised Grievance Management System (CGMS) for timely resolution.

  7. Tier II Account for Additional Investments

• An optional Tier II NPS account allows unrestricted withdrawals and no additional annual maintenance charges, making it ideal for managing surplus funds.

Account Options

The National Pension System (NPS) offers two types of account options for subscribers under the Corporate Sector Model:
  1. Tier-I Account – Primary Retirement Pension Account

• The Tier-I NPS account is the mandatory and core retirement account under the NPS architecture.
• Contributions to this account can be made by both the employer and employee, building a long-term retirement corpus.
• Income tax benefits are available on both employee and employer contributions under the Income Tax Act, 1961.
• Withdrawals and exits from Tier-I accounts are governed by the Pension Fund Regulatory and Development Authority (PFRDA) regulations.
• Designed specifically for retirement planning, premature withdrawal is restricted, with specific provisions for exit.

  2. Tier-II Account – Voluntary Investment Account

• The Tier-II NPS account is an optional and flexible investment account, available only to existing Tier-I account holders.
• It provides access to the same NPS fund management framework at very low cost, making it ideal for additional savings and short-term investments.
• No lock-in period: Subscribers can withdraw funds anytime, offering complete liquidity.
• No tax benefits: Contributions and returns under Tier-II accounts are not eligible for tax deductions or exemptions.
• Zero Annual Maintenance Charges (AMC): There are no additional charges for maintaining a Tier-II account.
• Switching facility: Subscribers can transfer funds from Tier-II to Tier-I account as per guidelines.
• Activation of Tier-II account can be done simultaneously with Tier-I account registration or any time later.
   

Contribution

The National Pension System (NPS) offers a flexible contribution structure under the Corporate Sector Model, allowing both employers and employees to customize their retirement funding approach.

Types of Contribution Options in NPS
Organizations and employees can select from the following contribution models:

• Equal contributions by employer and employee (e.g., 10% each)
• Unequal contributions (e.g., 14% by employer, 10% by employee)
• Contribution by either party – only by employer or only by employee

This flexibility helps align retirement contributions with the company’s compensation policy and the employee’s financial planning goals.

Minimum Contribution Requirements
For Tier-I Account (Mandatory Retirement Account)

• Minimum amount per contribution: Rs. 500
• Minimum contribution per year: Rs. 1,000
• Minimum number of contributions per year: 1

Note: If the subscriber fails to meet the minimum contribution criteria, the Tier-I NPS account will be frozen until compliance is restored.
 

Investment Choices

The National Pension System (NPS) offers flexible investment choices to suit the financial goals and risk appetite of both employers and employees under the Corporate Sector Model.
  1. Flexibility in Pension Fund and Asset Allocation Selection
  Under the NPS Corporate Model:

• The employer has the option to:
• Select the Pension Fund Manager (PFM) and investment strategy centrally for all employees, or
• Allow individual employees (subscribers) to make their own selection.
• If the employer chooses the Pension Fund and asset allocation on behalf of the employee, the employee may revise their choices after 1 year (365 days), provided the employer permits it.

Note: As per PFRDA Circular No. PFRDA/2018/53/P&D/2 dated 14.11.2018, this revision policy is applicable prospectively for new corporates joining NPS. Existing corporates (including banks) will maintain the status quo.

  2. Selection of Pension Fund Manager (PFM)

• Employers or individual subscribers (as allowed) can select any Pension Fund Manager registered with PFRDA.
• To view the latest list of approved Pension Funds, visit the PFRDA website.

  3. Asset Allocation Options under NPS
  Subscribers can choose between two investment strategies:
    A. Active Choice – Self-Directed Allocation
    This option allows the Corporate/Subscriber to actively decide the distribution of investments across the following asset classes:

• Asset Class Maximum Allocation
• Equity (E) Up to 75%
• Corporate Bonds (C) Up to 100%
• Government Securities (G) Up to 100%
• Alternate Assets (A) Up to 5%

    B. Auto Choice – Life Cycle-Based Allocation
    In this option, asset allocation is automatically adjusted based on the age of the subscriber. The equity exposure reduces gradually as the subscriber ages.
    Three predefined Life Cycle Fund options are available:

1. LC25 – Conservative Life Cycle Fund
2. LC50 – Moderate Life Cycle Fund (Default option)
3. LC75 – Aggressive Life Cycle Fund

Age	Aggressive Life Cycle Fund (LC-75)			Moderate Life Cycle Fund (LC-50)			Conservative Life Cycle Fund (LC-25)
	Asset Class (%)			Asset Class (%)			Asset Class (%)
	E	C	G	E	C	G	E	C	G
Upto 35 years	75	10	15	50	30	20	25	45	30
Upto 36 years	71	11	18	48	29	23	24	43	33
Upto 37 years	67	12	21	46	28	26	23	41	36
Upto 38 years	63	13	24	44	27	29	22	39	39
Upto 39 years	59	14	27	42	26	32	21	37	42
Upto 40 years	55	15	30	40	25	35	20	35	45
Upto 41 years	51	16	33	38	24	38	19	33	48
Upto 42 years	47	17	36	36	23	41	18	31	51
Upto 43 years	43	18	39	34	22	44	17	29	54
Upto 44 years	39	19	42	32	21	47	16	27	57
Upto 45 years	35	20	45	30	20	50	15	25	60
Upto 46 years	32	20	48	28	19	53	14	23	63
Upto 47 years	29	20	51	26	18	56	13	21	66
Upto 48 years	26	20	54	24	17	59	12	19	69
Upto 49 years	23	20	57	22	16	62	11	17	72
Upto 50 years	20	20	60	20	15	65	10	15	75
Upto 51 years	19	18	63	18	14	68	9	13	78
Upto 52 years	18	16	66	16	13	71	8	11	81
Upto 53 years	17	14	69	14	12	74	7	9	84
Upto 54 years	16	12	72	12	11	77	6	7	87
Upto 55 years	15	10	75	10	10	80	5	5	90

Balanced Life Cycle Fund (BLC): The maximum equity allocation under BLC is 50% which taper down after the age of 45 years as compared to 35 years under LC50. The asset class wise distribution at different ages is as under: 

Balanced Life Cycle Fund (BLC)
Age	Asset Class E	Asset Class C	Asset Class G
Upto 45 Years	50%	30%	20%
46 Years	48%	28%	24%
47 Years	46%	26%	28%
48 Years	44%	24%	32%
49 Years	42%	22%	36%
50 Years	40%	20%	40%
51 Years	39%	18%	43%
52 Years	38%	16%	46%
53 Years	37%	14%	49%
54 Years	36%	12%	52%
55 Years and beyond	35%	10%	55%

 

For detailed investment guidelines refer to the Circular Section of PFRDA website.

Charges

Charges related to Tier-I account can be borne either by Corporate/Employer or Subscriber, at the discretion of Corporate.

Intermediary	Charge head	Service Charges*			Method of Deduction
Point of Presence	Subscriber registration	Minimum ₹ 200 to Maximum ₹ 400 (negotiable within slab only)			To Be collected Upfront
	Initial Contribution	Upto 0.5% of contribution amount Minimum ₹ 30/- Maximum ₹ 25000/- (negotiable within slab only)
	Subsequent transactions
	Non-Financial transactions	₹ 30
	Contribution through eNPS platform of NPS Trust	0.20% of contribution, Min. ₹ 15 Max. ₹ 10000 (for NPS All Citizen and Tier-II accounts)
	Trail commission for D-Remit Contributions	0.20% of the contribution amount (Minimum ₹ 15 and Maximum ₹ 10,000) (Only for NPS All Citizen and Tier – II Accounts)			Unit deduction on periodic basis
	Processing of withdrawal / exit	0.125% of corpus Minimum ₹125 Maximum ₹500			To be collected upfront
	Persistency Charges	₹ 50 per annum for annual contribution ₹ 1000 to ₹ 2999 ₹ 75 per annum for annual contribution ₹3 000 to ₹6 000 ₹100 per annum for annual contribution above ₹6 000 (only for NPS All Citizen)			Through cancellation of units
Central Recordkeeping Agency	Account Opening charges (One Time)*	Protean	K Fintech	CAMS
		₹ 40	₹ 39.36	₹ 40
	Account Maintenance Charges (Per Annum)	₹ 69	₹ 57.63	₹ 65
	Charge per transaction (Financial /non-financial)	₹ 3.75	₹ 3.36	₹ 3.50
Pension Fund	Investment Management Fee	0.03% - 0.09%			Adjustment in NAV of Scheme
NPS Trust	Reimbursement of Expenses	0.003% p.a. of Assets Managed
Custodian	Asset Servicing charges	0.000000001770% p.a. of assets in custody

* In case a subscriber opts not to have a physical PRAN Card or Welcome Kit, reduced account opening charges of CRA are applicable as under:

CRA	Account opening with Physical PRAN card (in Rs.)	Account opening with ePRAN card (in Rs.)
		Welcome kit sent in hardcopy	Welcome kit sent vide email only
Protean	40.00	35.00	18.00
Kfintech	39.36	39.36	18.00
CAMS	40.00	40.00	18.00

Tier-II transaction charges are same as Tier-I.