Capacity Building Material

स्वावलंबन के साथ अब हम भी रिटायि हो सकत ेहै!

Capacity Building

Material (Part II)

Pension Fund Regulatory & Development Authority 1stfloor ,ICADR Building, Plot no.06, Vasant Kunj , Institutional Area, Phase-II New Delhi-110070,

Telephone no :011-26897948-49, Fax no 26897938

NPS/Swavalamban Aggregator Presentation (T-2) Page no.

1. Trainer/ Facilitator information……………………………………………………………………… 2

2. About Aggregator…………………………………………………………………………………………… 3

3. Potential Entities for Role of Aggregator……………………………………...................... 4

4. Eligibility Criteria……………………………………………………………………………………………. 5

5. Security Deposit……………………………………………………………………………………………… 6

6. Revenue Structure…………………………………………………………………………………………… 7-8

7. List of Existing Aggregators…………………………………………………………………………… 9

8. Relation Between Aggregator and Subscriber………………………………………………… 10-18

9. The NPS/Swavalamban Architecture and Entities………………………………………….. 19

10. About PFRDA………………………………………………………………………………………………… 20-21

11. The NPS/Swavalamban Architecture- CRA………………………………………………………22-23

12. About CRA……………………………………………………………………………………………………… 24

13. Services Provided by CRA…………………………………………………………………………………25-26

14. Aggregators’ role in relation to CRA……………………………………………………………… 27-34

15. The NPS/Swavalamban Architecture- Trustee Bank…………………………………………35-36

16. Aggregators’ role in relation to Trustee Bank………………………………………………… 37-39

17. The NPS/Swavalamban Architecture-NPS Trust……………………………………………… 40-41

18. The NPS/Swavalamban Architecture-Custodian……………………………………………… 42-43

19. The NPS/Swavalamban Architecture-PFM…………………………………………............. 44-45

20. The NPS/Swavalamban Architecture-ASP……………………………………………………… 46-47

21. The NPS/Swavalamban Architecture-Information flow………….......................... 48

22. The NPS/Swavalamban Architecture-Fund flow……………………………………………. 49

23. The NPS/Swavalamban Architecture……………………………………………………………… 50-51

24. NPS/Swavalamban Aggregator Presentation………………………………………………. 52-77

25. Investment Dairy………………………………………………………………………………………….. 78-81

Contents

2

Trainer /Facilitator Information

The accompanying presentation is intended for familiarizing the par-

ticipants with NPS - Swavalamban as a product and also other fea-

tures of NPS System. This will help the presenter to effectively com-

municate with the intended ground level stakeholders ( subscribers or

NPS marketing team of the aggregator).

In order to effectively deliver the presentation:

Presenter must have a knowledge of the material contained in this

guide, he/she may also read all relevant documents from the

PFRDA and NSDL websites

The guide is intended to assist the presenter in understanding the

various issues mentioned in the accompanying presentation. This

guide provides additional information/clarification on the scope of

each slide and intended message sought to be covered for the

benefit of the participants.

Prepared By

Pension Fund Regulatory and Development Authority

OBJECTIVES OF THE PRESENTATION

Explain NPS —Swavalamban

as a product

Elicit queries on various as-

pects of the product

To obtain feedback on addi-

tional clarification/Information

that will be required by the

aggregator’s staff for com-

municating with subscriber

Help the Aggregator to pre-

pare minutes for reference /

record .

Training Manual 2

NPS - Swavalamban Aggregator Presentation

Presentation On

for Aggregators

1

3


Aggregators are entities registered by PFRDA for bringing their constituent

subscriber base/others under the coverage of NPS - Swavalamban and provide

subscriber services as prescribed under NPS - Swavalamban System.

Aggregator

Q&A

Who are aggregators?

Aggregators shall be

intermediaries identified and

approved by PFRDA, to

perform subscriber interface

functions under NPS-

Swavalamban in respect of

their constituent groups.

They shall be entities already

in existence having

continuous functional

relationship with a known

customer base for delivery of

some socio-economic

goods / services.

Aggregator

Aggregators are entities registered by PFRDA who act as the only link between the Subscriber and National Pension

System.

Aggregator

Subscribers

SubscribersSubscribers

Aggregator

Subscribers

SubscribersSubscribers

2

4

Trainer/Facilitator Information

Following entities are potential aggregators:-

Nodal offices/entities running certain schemes for identified beneficiary groups under Central

and State Governments.

Micro-Finance Institutions (MFIs).

Non Banking Finance Companies (NBFCs).

Non Government Organizations (NGOs).

Entities running common service centers under National E-Governance Plan

Any other category as identified by PFRDA from time to time.

Potential Entities For Role of Aggregator

Nodal offices/entities running certain schemes for identified beneficiary

groups under Central and State Governments (e.g. Labour Boards).

Micro-Finance Institutions (MFIs).

Non Banking Finance Companies (NBFCs).

Non Government Organizations (NGOs).

Entities running Common Service Centers under National E-Governance

Plan.

Any other category as identified by PFRDA from time to time, such as

Banks, Regional Rural Bank etc.

Potential Entities For Role Of Aggregator

3

5


Apart from the points mentioned in the presentation, following additional requirements are manda-

tory :-

The entity must have trained staff with administrative and IT capability as prescribed.

The entity or any of its directors /promoters etc must not have been subjected to any disciplinary

proceeding (s) under the rules, regulations and by-laws of any regulator/disciplining body during

the last three years.

Eligibility Criteria—Aggregators

The Entity must be in the business of Financial Services or Commodity

Development for at least 3 years and must be financially viable.

Must have a formal governance structure

Must meet the Net worth criteria :-

Rs 1 crore for those in business for 3-5 years

Rs 50 Lakhs for those in business for more than 5 years

Entity must have the capability to manage large customer database.

Entity must have the cash management & transfer capabilities as

prescribed by PFRDA.

PFRDA may, at its discretion, relax some, or all of these eligibility criteria in case of entities which are fully or partly controlled by either

Central or any State government or have been created under any specific arrangement of the Central or State government or any other

entity with proven track record, on a case to case basis, in the initial stages of development of the sector.

Eligibility Criteria

4

6


Each entity enlisted as an aggregator shall have to submit a security deposit in the form of a demand draft or a bank guarantee from a scheduled commercial bank.

The quantum of security deposit shall be determined in terms of the net worth of the entity.

Security deposit = 1% of net worth or Rs 20Lakh, whichever is less

In case of Regional Rural Bank registered as Aggregator under NPS, quantum of

security shall be equals to 1 % of net-worth or 10 Lakhs whichever is less.

Security deposit is subject to a minimum of 5Lakh

Security Deposit

Each entity enlisted as an aggregator shall have to submit a security

deposit in the form of a demand draft or a bank guarantee from a

scheduled commercial bank

The quantum of security deposit shall be determined in terms of the net

worth of the entity

• Security deposit = 1% of net worth or Rs 20Lakh , whichever is less.

• In case of Regional Rural Bank registered as Aggregator underNPS, quantum of security shall be equals to 1 % of net-worth or 10Lakhs whichever is less.

• Security deposit is subject to a minimum of Rs 5 Lakhs.

Security Deposit

5

7


Revenue structure for aggregators:

•The aggregators shall not be authorized to collect any sum from the subscribers towards their own fee/service charges.

•The aggregators shall receive a fixed sum per eligible account at the end of Financial Year from PFRDA

Revenue Structure for Aggregators

Revenue Structure for Aggregators

At the End of Financial Year

Payment Cycle

Subscriber Enrolled per Year

Below 1 Lakh

1 Lakh to3 Lakhs

3 Lakhs to5 Lakhs

Above 5 Lakhs

Fixed Defined as

per Regulation

Rs.100 Rs.100 Rs.100 Rs.100

Variable Volume Driven

Incentive Rs.20 Rs. 30 Rs.40 Rs.50

Note: Only for Swavalamban eligible accounts.

At the End of Financial Year

6

8


The presenter must familiarize himself /herself with the incentive structure and should be able to explain the detailed calculation in the above illustration on Swavalamban eligible accounts. It may be useful if the presenter could take some easy examples to drive home the calculations

Illustration on Revenue Structure

Note: Only for Swavalamban eligible accounts.

Illustration on Revenue Structure

Incentive shown here are indicative amounts for illustration purpose only.

Subscriber Registration Renumeration

Year 1 Year 2 Year 3 Year 1 Year 2 Year 3

Fixed Variable Fixed Variable Fixed Variable

New Subscribers 80000 120000 310000 Rs 80,00,000 Rs 16,00,000 Rs 1,20,00,000 Rs 36,00,000 Rs 3,10,00,000 Rs 1,24,00,000

Renewal Cases 0 80000 200000 0 0 Rs 80,00,000 0 Rs 2,00,00,000 0

Total 80000 200000 510000 Rs 96,00,000 Rs 2,36,00,000 Rs 6,34,00,000

7

9

Trainer/Facilitator’s Information

This slide mentions the names of existing Aggregators, sector wise:

66 Aggregators have been registered under NPS -Swavalamban.

41 Government Organizations. (Undertakings , Autonomous Bodies ,Banks, Wel-

fare Boards etc)

25 Non-Government Organization (MFI’s , NBFC’s etc)

The presenter may use this slide to emphasize that the distribution channel for NPS-

Swavalamban is large and wide spread across various states in the country .He may

also explain that this makes it possible for subscriber to continue with contributions

even if he moves from the present location.

List of Aggregators is subject to change

Existing Aggregators

1. A. P. Building & Other Construction Workers

2. Allahabad U.P. Gramin Bank

3. Department of Post 4. Directorate of Women and Child Development

5. Karnataka State Un-organised Workers Social Security Board (KSUWSSB)

6. LIC Housing Finance Ltd

7. LIC of India

8. M.P. State Electronic Development Corporation Limited

9. Society for Elimination of Rural Poverty 10. Building and Other Construction Workers Welfare Board

(Rajasthan)

11. Jharkhand Building & other construction workers welfare Board

12. Canara Bank

13. Oriental bank of Commerce14. Punjab National Bank

15. Allahabad Bank

16. Bank of India

17. Bank of Baroda18. Indian Overseas Bank

19. Vijaya Bank

20. Corporation Bank

21. Indian Bank

1. Adhikar Micro Finance Private Limited

2. Bandhan Financial Services Pvt. Ltd.3. Bandhan Konnagar

4. ESAF Microfinance

5. Financial Inclusion Network And Operations Ltd

6. BWDA Finance Ltd.7. M/S Cashpor Micro Credit

8. South Indian Bank Limited

9. Alankit Assignments Ltd

10. IFMR Holdings Private Limited 11. SPANCO Ltd.

12. Banaskantha Dist. Co-op. Milk Producers Union Limited

13. SREI Sahaj e-Village Limited (SSEL)

14. Samhita Community Development Services15. Saptarishi Consultancy Services

16. SEWA Bank

17. Shree Kshethra Dharmasthala Rural Development Project18. Abhipra Capital Ltd

19. C DOT

20. Margdarshak Financial Services

21. IL$FS Securities

22. Indur Intimideepam 23. India Infoline limited

Government

( Undertakings , Autonomous Bodies Banks etc)

(41)

Non - Government

(25)

AGGREGATORS(As on 09/11/2012) 66

Aggregators

8

22. State Bank of Patiala23. Union bank of India 24. Saptagiri Grameen bank25. Karnataka Gramin Bank

26. North Malabar Gramin Bank

27. Krishna Gramin Bank

28. Nainital Almora Kshetriya Gramin Bank

29. Dena Bank

30. State Bank of Mysore

31. Sate bank of Bikaner & Jaipur

32. United Bank of India

33. State Bank Of Hyderabad

34. Baroda Gujarat Gramin Bank

35. Parvatiya Gramin Bank

36. Pallavan Gramin Bank

37. Puduvai Bharthiar Gram Bank

38.Saptagiri Gramin Bank

39.Jhabua Dhar Kshetriya Gramin Bank

40. Baroda Rajasthan Gramin Bank

41.Andhra Bank

Government

( Undertakings , Autonomous Bodies Banks etc)

(41)

Non - Government

(25)

AGGREGATORS(As on 09/11/2012) 66

Aggregators

9

24. Asomi finance Pvt. Limited

25. Grameen FinancialServices

10

Trainer /Facilitator Information The following slides will explain the Role and Responsibilities of the Aggregator in relation to Subscribers.

Aggregator & Subscriber

11


Aggregator shall be the primary point of interaction between the subscriber and NPS - Swavalam-

ban.

The presenter should explain to the participants that the aggregator and his staff play a very im-

portant role in the system. Their efficiency in performing each of the aforementioned duties is cru-

cial to ensuring that the subscriber stays in the system for a long period .This is important since it

ensures that the subscriber gets a reasonable pension and the aggregator get a long term revenue

stream with lesser effort.


Aggregator with the Subscribers

Aggregator shall be the primary point of interaction between the subscriber and the NPS - Swavalamban architecture.

The Aggregator shall perform the following activities for the subscriber.

1. NPS - Swavalamban Awareness

2. Subscriber Registration

3. Subscriber Servicing

4. Grievance Handling

10

12


The presenter should explain the following points in detail :

1. Need for pension/old age income security.

One is not as productive in the old age as in the young age.

The rise of Nuclear family –Migration of younger earning members.

Rise in cost of living

Increasing longevity

2. NPS is a the ideal product to meet the need for old age income security.

Catering to Unorganized Sector and special Focus on economically disadvantaged/marginal investors

Easy entry through an aggregator

Ultra low charge structure (Account Opening – Rs 35 (One Time) AMC – Rs 70/Annum and 12 Transactions are free per

annum.)

3. Govt. support to NPS - Swavalamban for small and regular investors. ( Rs 1000 contribution to each NPS

account where subscriber contribution is between Rs 1000 to Rs 12000)


1. Swavalamban Awareness

The Aggregator has an important role to play in creatingawareness on the following points:

Need for pension/old age income security.

NPS is the ideal product to meet the need for old ageincome security.

Government support to NPS - Swavalamban for smalland regular investors .

11

13


The presenter should explain the responsibility of the aggregator in registering the subscriber in

NPS -Swavalamban, the process detail and emphasize the importance of the following checklist :

Has the photograph been pasted?

Has the signature/thumb impression been provided within the given box?

Have all the mandatory fields been filled in?

Has the application form been duly signed/has the Thumb impression, if used, been attested?

Whether KYC documents have been submitted?

Collection of Rs 100 for registration.

Since rejection of the form by CRA can cause a lot of inconvenience to the aggregator in collecting

it again from remote locations, the presenter must emphasis that the staff should pay due atten-

tion to the correct filling up the forms and submission of complete KYC documents and

declarations to CRA –FC.

After registration the most important activity to be performed by the aggregator is collection of

regular contributions from subscribers and uploading it on a weekly basis into the system.


Q&A

Q: Who can join?

A: A citizen of India, who is either

economically disadvantaged or

covered under the provision of sec-

tion 6 Part B of the “Regulations for

Aggregators under NPS Lite-

Swavalamban- 2010” subject to the

following conditions:

Should be between 18 – 60

years of age as on the date of

submission of his/her applica-

tion by Aggregator.

Should comply with the KYC

process carried out by Aggre-

gator

2. Subscriber Registration and Contribution Processing

Helping subscriber to register into NPS -Swavalamban.

Receiving and Verifying duly filled forms fromsubscribers.

Checking of KYC documents and eligibility ofsubscribers.

Ensuring the first contribution of a minimum of Rs 100and collecting subsequent contributions.

Processing of forms.

Collection of subscriber’s regular contribution anduploading it into the system.

Transferring of fund to the system

12

14

Trainer /Facilitator Information The presenter should explain that the aggregator is the link between the subscriber and NPS system and hence any activity

required to be performed for the subscriber has to be mandatorily routed through the aggregator .

It needs to be explained that before uploading any servicing request ( As detailed above). Aggregator must obtain

prescribed documents and satisfy himself on genuineness of the same .

Aggregator is responsible for processing the Withdrawal Request.


3. Subscriber ServicingThe Aggregator is the nodal point for servicing the customer

Process subscriber requests for carrying out changes in thefollowing cases:

O NameO AddressO Phone/Mobile Number/Email IDO Subscriber Bank DetailsO Change in nomination details

The Aggregator must ensure that in all cases the request for change should be supported with prescribed documents

Request for re issue of PRAN card

Provide information on Statement Of Transactions

Process withdrawal requests (this is important and is detailed in the next slide)

Any other requests by subscriber 13

15


Whenever the subscriber wishes to exit from NPS -Swavalamban he/she must submit the withdrawal

request to the aggregator for onward transmission to CRA .The process flow shows the flow of information &

cash in the event of a regular (at the age of 60) or premature withdrawal ( before the age of 60)

Explain the process through arrows marked 1-6.

Presenter should emphasize that the subscriber can make choices regarding :

(a) Percentage of corpus for lump sum withdrawal ( Not more than 60%)

(b) Phased withdrawal of lump sum amount up to the age of 70 .

(c) ASP ( Annuity Service Provider)

(d) Type of pension

It may be noted that the aggregator must obtain the bank account details of subscriber/nominee in the

withdrawal form since neither the lump sum amount nor the pension will be paid in cash . This is as per the

legal requirement , ensures safety for the subscriber and operational ease for the aggregator .

Aggregator & Subscriber—Withdrawal Process

Subscriber Servicing - Withdrawal Process

CRA system

Pension Fund

Manager

Trustee Bank

Transferof Settlement amount

Aggregator

Maker Checker

WithdrawalRequest

Request Processing • Execution of withdrawal Request

•withdrawal instructions to Trustee Bank & PFM

Calculates NAV andtransfers money toTB

Subscribers / Nominee

Transfers settlementamount intosubscribers and ASP

Cash Flow

Information Flow

1 2

3

4 5

6

14

16


Aggregator & Subscriber—Withdrawal Process

Subscribers can normally exit from New Pension System (NPS) on attaining the age of 60. Any exit before the age of 60 is permit-

ted but will deemed as pre-mature withdrawal .

Normal Exit : On attaining the age of 60 years, a subscriber would be required to invest minimum 40% of his / her accumulated

savings (pension wealth) to purchase a life annuity.

A subscriber may choose to purchase an annuity for an amount greater than 40%. The remaining pension wealth can either be

withdrawn in a lump sum on attaining the age of 60 or in a phased manner, between age 60 and 70, at the option of the subscriber.

Premature withdrawal: On premature withdrawal of the subscriber, 80% of the corpus has to be annuitized and the subscriber can

withdraw remaining wealth.

At the time of exit, our effort is to give a monthly pension of Rs.1000/-. If 40% or 80% of corpus is not sufficient to give pension of

Rs.1000/- higher percentage or entire pension wealth would be subject to annuitisation.

Death: On death, the entire corpus of the subscriber will be handed over to the nominee of the subscriber.

The withdrawal request can only be submitted to the aggregator.

It should be made clear that once the withdrawal request is executed in full, the NPS account is closed in the system and corpus in

subscriber account will be disbursed as per instructions in the withdrawal request.

Withdrawal Process

Exit on 60 yrs

Subscriber would be required to invest minimum 40% of accumulated savings (pension wealth) to purchase annuity.

Choose the annuity service provider.

Subscriber will provide the bank account and withdrawal details to aggregator and aggregator to upload the information for execution in CRA System.

At the time of exit, our effort is to give a monthly pension of Rs.1000/-. If 40% of corpus is not sufficient to give pension of Rs.1000/- higher percentage or entire pension wealth would be subject to annuitisation.

Exit before 60 yrs

Subscriber would be required to invest minimum 80 % of accumulated savings (pension wealth) to purchase annuity.

Choose the annuity service provider.

Subscriber can withdraw balance 20%.

At the time of exit, our effort is to give a monthly pension of Rs.1000/-. If 80% of corpus is not sufficient to give pension of Rs.1000/- higher percentage or entire pension wealth would be subject to annuitisation.

Withdrawal on Death of Subscriber

In case of death, the entire corpus will get transferred to the nominee/ legal heirs.

The nominee/ legal heir will approach the aggregator with necessary documents such as Death Certificate of the deceased, Identify proof of the nominee, etc.

Withdrawal will be done through the Aggregator.

15

17


This slide explains the process flow for Subscriber Servicing

The arrows with numbers indicate the information flow.

It should be clearly explained again that subscribers interface with the system is through the

aggregator.


Q&A Q&A

How to check the status of the

Grievance?

Aggregator can check the status

of the grievance at the CRA

website www.npscra.nsdl.co.in

or through the Call Centre by

mentioning the token number.

Aggregator can also raise a

reminder through any one of the

modes mentioned above by

specifying the original token

number issued.

Process flow for Subscriber Servicing

Subscriber

Account Office

CRA

Request to Change details

Acknowledgement Number through

e-mail/web access

Request capture & Authorize

Collection Center

Verify and forward

https://cra-nsdl.com

1.

2.

3. 4.

5.

6.

16

18

Trainer /Facilitator Information Subscriber can access CRA system only through Aggregators, this is an important part of

Aggregators'’ duties.

Central Grievance Management System (CGMS) has been provided under NPS-Swavalamban to receive,

resolve and record different types of grievances, from different entites/actors of NPS-Swavalamban system.

In NPS-Swavalamban, Subscribers would be eligible to lodge grievances either through their Aggregator or

directly to CRA. Subscriber/ Aggregator has the option of registering grievance/complaint through the

following modes:

Call Centre/Interactive Voice Response System (IVR)

Aggregator on behalf of its underlying subscriber can contact the CRA call centre at toll free telephone

number 1-800-222080 and register the grievance. Aggregator will have to authenticate themselfs through

the use of T-pin allotted at the time of registration under the NPS-Swavalamban. On successful registration of

the grievance, a token number will be allotted by the Customer Care representative for any future reference.

Web based interface

Aggregator on behalf of its underlying subscriber can register the grievance at the website

www.npscra.nsdl.co.in with the use of the I-pin allotted at the time of registration under the NPS-

Swavalamban. On successful registration, a token number will be displayed on the screen for future

reference.

Physical forms

Subscribers can submit the grievance against their Aggregator in a prescribed format to CRA, who would

forward it to PFRDA for resolution. The form prescribed is available on CRA website. The aggregator must

disseminate this information to the subscribers .


What are the modes of raising

grievances?

The subscriber can raise/submit the

grievance to GRC (Grievance Re-

dressal Cell) through any of the

modes mentioned below:

Email: [email protected]

Letter:

Grievance Redressal Cell

Pension Fund Regulatory and Devel-

opment Authority

1st Floor, ICADR Building, Plot No 6,

Vasant Kunj, Institutional Area,

Phase – II, New Delhi – 110070, Tel

no – 011 26897948-49

Fax: 011-26892417

Phone: 1800 110 708

Q&A


Receiving of grievances submitted by the subscriber against

any NPS Intermediary including aggregator .

Uploading all grievances in the Central Grievance

Management System (CGMS) of CRA on a daily basis.

The CGMS system of CRA would route the grievances to

respective NPS intermediaries for resolution.

17

19


This slide details the various intermediaries in the NPS Architecture . Presenter should explain the name and function of each intermediary and their interdependence. The aggregator’s interface in the system is with CRA and Trustee Bank It should be emphasized that the Un-Bundled Architecture is designed to cater to the current and future needs of the New Pension System. Un-Bundled architecture ensures the protection of both—Funds and Information

Presenter may quote “As this slide seems to be complex, the next few slides will explain each entity

and its role in NPS-Swavalamban”

The NPS -Swavalamban Architecture & Entities

The NPS – Swavalamban Architecture & Entities

Aggregator

NPS Trust

PFMs


18

CRATrustee

Bank

Annuity Service

ProviderCustodian

INTERFACE

The various entities in the NPS-Swavalamban architecture as

represented above and their roles are detailed in the next few slides

20


This slide introduces the Pension Fund Regulatory and Development Authority (PFRDA)

The Next slide explains the role of PFRDA in NPS -Swavalamban.

NPS -Swavalamban Architecture—PFRDA


NPS - Swavalamban Architecture - PFRDA

Subscriber

Aggregator Account Office

AggregatorCollection

Center

AggregatorOversight Office

19

21


The presenter should explain the role and responsibility of PFRDA as a regulator for development of pen-sion sector in India .

Regulator established by GOI to promote Old Age Income Security in the country.

PFRDA is the prudential Regulator for the National Pension System (NPS).

Develop & Regulate pension market for subscribers and funds .

PFRDA has put in place the Institutional framework and infrastructure required for administering NPS .

NPS has been adopted for employees of Central and State Governments, and all citizens of India, in-cluding self employed and economically disadvantaged sections of society.

PFRDA

PFRDA is the regulator established byGovernment of India to promote old ageincome security in the country.

PFRDA Establishes, develop and regulatepension funds, to protect the interests ofsubscribers to schemes of pension fundsand for matters connected therewith orincidental thereto.

PFRDA has put in place the institutionalframework and infrastructure required foradministering the ‘National Pension System’(NPS) for government employees & allcitizens of India.


20

22


The presenter should brief the participants about the pension coverage under NPS. It is important to note that NPS caters to more than 20 lakh government servants. Almost all state governments have adopted NPS for their own employees. A number of corporate like Reliance Power Transmission Limited, ICICI Securities Limited, Delhi Airport Metro Express Pvt Ltd etc have also adopted NPS for their employees . However In the case of non-government sector ,only the subscribers of NPS -Swavalamban get a co-contribution from the Government which makes the scheme very attractive.

PFRDA

Sector Number of Subscribers

AUM(Rs Crores)

Central Government

1,060,062 14,835

State Government 1,462,413 7,426

Private 163,317 745

NPS Lite 1,297,456 344

Total 3,983,248 23,350

Pension Coverage under NPS ( As on 07-11-2012)

22*In Financial Y ear (2011-2012 ) 6.39 lakh subscribers were eligible for

Swavalamban incentive

23


This slide introduces the first intermediary in NPS i.e. Central Record Keeping Agency (CRA)

The Next slide explains the role of CRA in NPS -Swavalamban.

NPS -Swavalamban Architecture


Central Recordkeeping

Agency

NPS - Swavalamban Architecture - CRA

Subscriber



Center


22

24


Central Recordkeeping Agency (CRA): The recordkeeping, administration and customer service functions for all subscribers of the NPS-Swavalamban are being handled by National Securities Depository Limited (NSDL), which is acting as the Central Record-keeper for the NPS –Swavalamban

NSDL has been appointed as CRA by PFRDA.

Activities performed by CRA.

Registration of entities as aggregator including registration of OO,AO,CC.

Record keeping

Administration

Customer Service functions for all subscribers.

CRA – FC does digitization and PRAN Generation upon receipt of verified subscriber registration forms from the aggregators.

Central Recordkeeping Agency

25

Trainer/Facilitator Information Services Provided by CRA

CRA is the hub of the NPS system. Maintains database

of all PRANs and records the transactions related to

each subscriber’s PRAN. CRA stores the choices made

by the Aggregators and implement instructions given by

the aggregators.

Receives instructions from subscribers through the

aggregator and transmits such instructions to Trustee

Bank, ASP and PFMs .

Monitors aggregator contribution and gives instructions

to TB to transfer the funds to the relevant PFMs .

Services provided by CRA

Q&A What are the services offered by CRA to sub-

scribers?

CRA shall register the Subscribers and allot

unique Permanent Retirement Account Num-

ber (PRAN) to them.

CRA shall maintain the Permanent

Retirement Account of the Subscribers and

shall facilitate the posting of units in

subscribers account as per the contribution

details and funds received from the

aggregators.

At the end of every financial year, CRA shall

send a Statement of Transaction to the

Subscriber containing the details of the

transactions in Subscribers Permanent

Account.

CRA shall register the grievances and send

the resolution details to the Subscribers

Services provided by CRA (1/2)Registration of aggregator offices – Oversight Office (OO)/Account office(AO)/ Collection Center (CC).

Issuance of unique PRAN to each subscriber.

Maintain database of all PRANs and record the transactions related to eachsubscriber’s PRAN.

Receive instructions from subscribers through their Aggregator; transmitsuch instructions to appointed Trustee Bank, Pension Fund Managers , AnnuityService Provider.

Monitor each Aggregator’s contributions and instructions to transmit theinformation to the respective PFMs on a daily basis.

CRA provides Aggregators, a web based interface to view/ download detailedhistory of transactions of PRAN.

24

26

Trainer/ Facilitators Information

Main Services Provided by CRA

Providing subscribers annual PRAN ac-

count statement detailing the total

contribution time wise credits into the

account and other relevant information .

Grievance Redressal.

Permanent Retirement Account information

to the subscribers/aggregators.

Providing web based interface to

aggregators for subscriber services.

Providing control reports and MIS’s to

aggregators .

Services provided by CRA

Q&A How do I register my grievances/complaints ?

Subscriber can raise a grievance through CRA website https://

cra-nsdl.com/CRA/. A subscriber can also contact his / her

aggregator, They can also raise a grievance on his/her behalf.

Subscriber can check the status of the grievance in CRA web-

site. A subscriber can also forward a duly filled G1 Form to

CRA for logging a grievance.

Can a CRA-FC reject the Subscriber application forms?

Aggregator will perform verification checks, such as whether

name is mentioned, photograph is attached, signature is pre-

sent, other mandatory fields (other supporting documents for

KYC norms prescribed by PFRDA) are properly filled, scheme

preference details are mentioned as required, first time contri-

bution amount etc. before accepting the form. In case the ap-

plication form is not filled with all the required details, CRA-FC

will not accept the registration form. CRA-FC will intimate a

aggregators regarding rejection of forms.

How will the grievance get resolved?

Whenever an aggregator raises a grievance, a system

generated alert goes to the entity against which the grievance

is raised. The respective entity then resolves the grievance

and posts resolution details in CRA system.

Providing subscribers with periodic PRAN account statementsdetailing the total contribution, time-wise credits into the account andother relevant information.

Grievance Redressal

Act on/transmit instructions of AggregatorsInvestment option selectionSwitching over optionsConfirmation report

Retirement Account Information to be provided to subscribersPension wealth accumulated in subscribers PRAAmount that can be withdrawn by subscriber in lump sum

Services provided by CRA (2/2)

27

Trainer/ Facilitator Information The following slides will explain the Roles and Responsibilities of the Aggregator in relation to CRA.

Aggregator & CRA

Aggregator’s role in relation to CRA

28

Trainer/Facilitator’s Information This slide mentions the Registration hierarchy of aggregators in NPS -Swavalamban Registration of Oversight Office (NL-OO): NL-OO is expected to undertake monitoring & controlling functioning of its underlying offices (NL-AOs and NL-CCs) towards discharging services as per the service standards defined by PFRDA. NL-OO is required to fill up the registration form (N1 form) and submit the same to CRA. The NL-OO is required to self-authorize the form before submission of the same to CRA (NSDL, Mumbai). Registration of uploading offices (NL-AO): Upon successful registration of the NL-OO, registration of uploading offices (NL-AO) shall commence. The NL-AO is expected to undertake contribution upload on CRA system and fund transfer to Trustee Bank for its underlying subscribers. NL-AO is required to fill up the registration form (N2 form) and submit the same to NL-OO for authorization. Upon authorization, NL-OO shall send the form to CRA for registration. Registration of Collection Centers (NL-CCs): Collection Centers are expected to interface with subscribers and perform key functions relating to collection of registration forms, undertaking KYC, contribution collection and passing the contri-bution information and funds to the NL-AO for further processing. Registration of NL-CCs will be undertaken upon com-pletion of registration of NL-AOs in NPS Lite. The NL-CCs Registration Form (N3) shall be authorized & forwarded by the respective NL-AOs to which they are linked .

Registration Hierarchy

29

Trainer/Facilitator Information Aggregators are the entities identified by PFRDA for bringing their constituent subscriber base /others under the coverage of NPS -Swavalamban and

provide subscriber services as prescribed under NPS -Swavalamban System. Aggregator shall be the point of interaction for the underlying subscribers

and will provide interface with the NPS system for subscriber services. Role and duties of Aggregators to be briefly touched upon.

Explain the three tier structure for aggregator and roles/function of OO, AO and CC’s. Role and functions of each is be explained in detail with need for

individual registration in the CRA system. Emphasize the flexibility of operation to suit the ground realities of each aggregator with disparate operational

competencies.

Model of Operation: At the time of registration, Entity shall have to specify the ‘Model of Operation’ it intends to adopt, in NL-OO registration form.

Aggregator can adopt any one of the following Model of Operations. Model of operation means interaction of any identified office with the NPS system.

Centralized Model:

Under this Model, NL-OO shall prepare a consolidated NL-AO wise subscriber contribution file. NL-OO shall also make one consolidated payment to the

trustee bank for the contributions accepted.

Decentralized Model:

Each NL-AO shall prepare subscriber contribution file based on contributions received and upload the same into NPS/Swavalamban system. NL-AO shall

transfer the subscriber contribution to the trustee bank.

Except for OO, Aggregator will have the facility to add/delete AO/CC as per the operational requirements.

Choice of one pension fund manager to be made by aggregator for all its underlying subscriber's.

Aggregator & CRA

Roles & Responsibilities of Aggregator in relation to CRA

Identification of designated offices & Registration as Aggregators.

Registration of Oversight Office (OO)

Account Offices (AO)

Collection Centers (CCs)

At the time of registration, OO shall specify/choose the following

Centralized / decentralized models of contribution upload

Choice of Fund Manager

Aggregator's

Oversight Office

Aggregator's

Account Office

Aggregator's

Account Office

Aggregator's

Account Office

Collection

Center

Collection

Center

Collection

Center

Collection

Center

Collection

Center

Collection

Center

Collection

Center

Collection

Center

30


This slide mentions the process flow for Registration of Aggregators and their offices.

Registration of Aggregators and their offices

Registration of Aggregators and their Offices

Form N1

Form N2

Form N3

Registration Forms available onPFRDA website

CRA

OO

AO

CC

Forwarding Form with covering letter

Details to be submitted to CRAName of the Office, Address, Email id,

Authorised Signature & Stamp

1

32

4 5

Subscriber

Forwarding Form with covering letter

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Trainer/ Facilitator Information

In NPS - Swavalamban PFM choice is made by the aggregator on behalf of their underlying subscribers. It may be not-

ed that the investment pattern ( Up to 55% in Government securities , 40 % in corporate bonds, up to 5% in money

market and up to 15% in equity) will be same as Government Subscribers for NPS –Swavalamban accounts.

Aggregator can choose the three Pension Fund Managers (PFMs) as in the case of Government subscribers.

LIC Pension Fund Limited

SBI Pension Funds Pvt. Limited and

UTI Retirement Solutions Limited.

Aggregator also has an option on choosing a single PFM out of the following PFM’s

ICICI Prudential Pension Funds Management Company Limited

Kotak Mahindra Pension Fund Limited

Reliance Capital Pension Fund Limited

SBI Pension Funds Limited

UTI Retirement Solutions Limited


Pension Fund Managers

Choice of PFM by Aggregator

PFM – Central Govt. Private Sector

ICICI Prudential pension Funds Management limited company

Kotak Mahindra Pension Funds Limited

Reliance Capital Pension Funds Limited



LIC Pension Fund Limited (34.0%)


(34.0%)


(32.0%)

Only one PFM should be selected by the aggregator on behalf of subscriber and should be confirmed (checked) in the subscriber registration form.

# As per new guidelines for registration of PFMs, there is no ceiling on number of PFMs. 30

32


The Aggregator shall perform the following activities as part of their mandat-

ed roles and responsibilities in the NPS -Swavalamban

1. Registration of designated offices of the Aggregator

2. Subscriber Registration—helping subscribers in filling up of forms.

3. Regular Contribution Uploading : it has two parts—SCF upload and trans-

fer of funds

4. Subscriber Servicing—PRAN card and SOT delivery, upload withdrawal

request etc.


PRAN Kits are dispatched CC wise, hence the importance of registration of CC and

CC wise enrollment of subscribers is to be emphasized for adequate monitoring.

Aggregator & CRA

Q: Who can join?

A: A citizen of India, who is either

economically disadvantaged or

covered under the provision of

section 6 Part B of the

“Regulations for Aggregators

under NPS Lite -Swavalamban-

2010” subject to the following

conditions:

Should be between 18 – 60

years of age as on the date

of submission of his/her ap-

plication by Aggregator.

Should comply with the KYC

process carried out by Ag-

gregator

Q&A

Registration of subscribers to be carried out with the submission of physical applications.

Verified physical forms to be submitted by aggregator to CRA-FCs.

CRA will print and dispatch the PRAN Kit, for the newly registered subscribers to AO.

CCAO /

OOCRA - FC

Checking and

Authorization of

Registration Forms

Consolidation and

Submission of forms to

CRA-FC

Digitising Subscriber

information and

upload to CRA main

CRA

CC wise PRAN Kits

generation & Dispatch

to Aggregator AO / OO

Subscriber Registration Process

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33


The arrows with numbers indicate the information flow.

Steps 1 to 3 & 8, 9 are to be performed by Aggregator.

Step 4 to 7 are to be performed by CRA

The presenter should explain the complete process as per the diagram and the arrows.

Process Flow - Aggregator & CRA

Subscriber

AO

Submission of Form Verification of details, provide KYC

documents, Consolidation and Submission

Scanning & digitization of Forms

Verification and Upload

Gen

erate PR

N

and

/or R

ejection

L

etter

CRA

CCNL-CC packets

Delivery of PRAN kit

Su

bm

issi

on

of

form

sCRA-FC

Process flow of Aggregator

1. 2.

9.

8. 3.

4. 7.

5.

6. 32

34


CRA will provide the FPU (File Preparation Unit) and FVU (File Verification Unit) utilities

to Aggregator to prepare the SCF( subscriber contribution file).

Aggregator AO to upload the SCF in CRA system and submission of funds to

trustee bank after receiving Transaction ID along with Contribution Submission

Form (CSF)

It needs to be clearly explained by the presenter that minimum contribution of Rs. 1000/-

should be made to draw Swavalamban benefit.

Subscriber & Aggregator

How much does a subscriber

need to contribute?

Minimum contribution amount at

the time of Registration - Rs

100

Minimum contribution require-

ment of Rs 1000 per year for

availing benefit under Swava-

lamban Scheme ,Government of

India.

Q&A

Collection of subscriber’s contribution by CC.

CRA will provide the software utilities to aggregatorsfor contribution upload.

Subscriber’s contribution upload by AO as decided bythe aggregator/facilitator.

Submission of funds to the Trustee Bank after receivingthe Transaction ID.

Regular Contribution Processing

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35

Trainer/ Facilitator’s Information

This slide introduces the Trustee Bank (TB). Bank Of India is the current TB

The Next slide explains the role of TB in NPS -Swavalamban.

NPS-Swavalamban Architecture


Trustee BankBOI

NPS -Swavalamban Architecture – Trustee Bank

Subscriber



Center


CRA

Reports/MIS

34

36


The Trustee Bank appointed under NPS shall facilitate fund transfers across various entities of the NPS system viz. PFMs, ASPs, Subscribers, etc.

Bank Of India functions as NPS Trustee Bank, few key functions it performs are:

Manages banking of Pension Funds.

Uploads details of contribution received from aggregator to CRA.

Transfers funds to PFMs.

Receives funds from the PFMs bank account to the NPS Trustee Bank’s account.

Transfers Funds Electronically/ Issuance of cheques for disbursement from withdrawal account and forwarding it to CRA.

Transfers funds to the ASP and/or to the subscribers account.

Trustee Bank

37

Trainer/Facilitator Information The following slides will explain the Roles and Responsibilities of the Aggregator in relation to Trustee Bank.

Aggregator & Trustee Bank

Aggregator’s role in relation to Trustee Bank

38


The arrows with numbers indicate the fund flow between Aggregator and TB. The presenter should

explain in detail the process flow.


Consolidation of Records

Submission of CSF & Transfer of funds

Fund Receipt

Confirmation

Aggregator

Trustee BankBOI

CRA

Process flow

1.

2.

37

39


Once the file has been successfully uploaded and the receipt is generated, the Aggregator can transfer the funds to the

Trustee Bank using electronic fund transfer facility such as NEFT/RTGS or Cheque Transfer.


Role & Responsibilities of Aggregator

Fund Transfer Process

The NPS/Swavalamban AO can transfer the funds to the Trustee Bank through the following modes:

Cheque transfer – Cheque to be submitted to the branch of the Trustee Bank along with the Contribution Submission Form(CSF).

Electronic transfer (RTGS/NEFT)– Instructions to be given to the bank’s nodal office to transfer the funds to the Trustee Bank. In the RTGS/NEFT application, the nodal office has to mention the following details:

City, Bank Name, Branch Details , Aggregator name, Account type, Account Name & Number. In remarks column – Aggregator Registration Number allotted by CRA and Transaction id are to be entered mandatorily.

38

40


This slide introduces the NPS Trust

The Next slide explains the role of NPS trust in NPS -Swavalamban.

NPS- Swavalamban Architecture


NPS Trust

NPS -Swavalamban Architecture –NPS Trust

Subscriber



Center


Trustee BankBOI

CRA

Reports/MIS

39

41

Trainer/Facilitators Information

The NPS trust has been constituted for taking care of the assets and funds held under NPS in the interest

of the beneficiaries (subscribers).

PFRDA has established NPS trust and has appointed NPS board of Trustees who oversee and monitor

the functioning of the Trustee Bank, Pension Fund Managers and also the custodian.

NPS Trust issues directions to PFMs for protecting the interests of subscribers.

Appoints panel of auditors for compliance audit.

To verify PFMs are strictly following the terms and conditions for the investment.

Call for information, reports etc from PFMs, Trustee Bank & Custodian.

NPS Trust

42


This slide introduces the Custodian - currently SHCIL is the Custodian

The Next slide explains the role of Custodian in NPS -Swavalamban.



Custodian(SHCIL)

NPS Trust

TB

NPS -Swavalamban Architecture - Custodian

Subscriber



Center


CRA

Reports/MIS

41

43


Custodian

Stock Holding Corporation of India Limited (SHCIL) is the custodian for NPS and

is the agency responsible for holding assets of the NPS Trusts in electronic and

physical form. This ensures safety of the underlying subscriber assets.

The Custodian is the agency responsible for holding assets of the NPS Trust.

44


This slide introduces the PFM (Pension Fund Manager)

The Next slide explains the role of PFM in NPS -Swavalamban.



Custodian(SHCIL)

NPS Trust

Trustee BankBOI

PFM

NPS -Swavalamban Architecture - PFM

Subscriber



Center


CRA

Reports/MIS

43

45

Trainer/Facilitator Information Seven PFM’s have been appointed by PFRDA to manage the retirement savings of subscribers under the NPS-Swavalamban. The PFMs

are required to invest strictly in accordance with guidelines issued by the Government of India and PFRDA.

Investment Pattern for NPS– Swavalamban – Up to 55% in Government securities , 40 % in corporate bonds, up to 5% in money market

and up to 15% in equity.

Names of the PFMs for easy recall are:

Government Sector


SBI Pension Funds Pvt. Limited and

UTI Retirement Solutions Limited.

Private Sector

ICICI Prudential Pension Funds Management Company Limited

Kotak Mahindra Pension Fund Limited

Reliance Capital Pension Fund Limited



As per new guidelines for registration of PFMs, there is no ceiling on number of PFMs.

PFM Choices

PFMs manage the retirement savings of subscribers under the NPS/Swavalamban. The PFMs are required to invest strictly in accordance with

guidelines issued by the Government/PFRDA

46


This slide introduces the Annuity Service Provider (ASP)

The Next slide explains the role of ASP in NPS —Swavalamban



Custodian(SHCIL)

NPS Trust

Trustee BankBOI

PFM

NPS -Swavalamban Architecture - ASP

Subscriber



Center


CRA

Reports/MIS

45

Annuity ServiceProviders

47


Annuity Service Providers (ASPs): ASPs would be responsible for delivering a

regular monthly pension to the subscriber after the exit from the NPS.

Following ASP’s are empanelled by PFRDA for providing monthly pension :-

1. Life Insurance Corporation of India

2. SBI Life Insurance Company Limited

3. Star Union Dai-ichi Life Insurance Company Limited

4. Reliance Life Insurance Company Limited

5. Bajaj Allianz Life Insurance Company Limited

6. ICICI Prudential Life Insurance Company Limited

7. HDFC life Insurance Company Limited

Q&A

What is Annuity?

Annuity in the context of NPS

refers to the monthly sum that

will be received by the

subscriber from the Annuity

Service Provider after he attains

the age of 60.

Who is the Annuity service pro-

vider?

Annuity Service Providers (ASPs)

is the entity who will be

responsible for managing the

funds (allocated for buying

annuity) and payment of the

pension after a subscriber

attains the age of 60. The ASPs

will be the entities regulated by

Insurance Regulatory and

Development Authority.

Annuity Service Providers

48


Schematic representation of NPS -Swavalamban architecture - Information Flow between the Aggregator & the Entities.

1. Subscriber to submit the duly filled application along with prescribed documents to Aggregator CC.

2- CC to check the information and documents on maker and checker basis and to send the same to AO.

3. AO to verify the application and upload the same to CRA system and send the physical documents to CRA wherever its necessary.

4. CRA and Trustee bank will interact to confirm receipt of fund against the upload from AO

5. CRA to send the information about the funds and investment pattern details received from aggregator to respective PFM and PFM will

inform CRA in respect of units created and NAV declared for the day.

6. PFM ’s to send the investment details /Instruments purchased to the custodian (SHCIL).

7. PFM to send the fund performance to NPS Trust periodically.

8. Trustee Bank to provide information to NPS Trust about the receipt of fund from PFM’s.

9. At the time of exit/withdrawal , CRA to send the Subscriber’s withdrawal request and information to respective ASP

(selected by subscriber).



Custodian(SHCIL)

NPS Trust

Trustee BankBOI

PFM

NPS -Swavalamban Architecture – Information Flow

Subscriber



Center


Information Flow

1

2

4

56

7

8

CRA

Reports/MIS

3


9

48

49


Schematic representation of NPS-Swavalamban architecture - Fund flow between

the Aggregator & the Entities.

1. Aggregator’s account office transfer’s the subscriber’s contribution to Trustee Bank.

2. Trustee bank transfer’s the funds received from aggregator to respective PFM’s for investment.

3. At the time exit/withdrawal ,Trustee bank to transfer the subscriber’s corpus to Annuity Service

Provider on instruction of CRA.

4. Trustee bank to transfer the lump sum payment to subscriber’s account

5. ASP to provide the monthly pension to subscriber’s account .

NPS - Swavalamban Architecture


Trustee BankBOI

Fund Flow


PFM

Funds FlowSubscriber



Center


NPS -Swavalamban Architecture – Fund Flow

1

2

34

5

49

50


Schematic representation of NPS -Swavalamban architecture

Explain name and function of each intermediary.

Interdependence of each intermediary and how this Un-Bundled architecture is organized to cater to

the current and future needs of the New Pension System.

Un-Bundled architecture ensures subscribers protection of both—Funds and Information

NPS-Swavalamban Architecture


Custodian(SHCIL)

NPS Trust

Trustee BankBOI

PFM


Subscriber



Center


CRA

1

2

3

4

6

7

8


Fund Flow

2

1

3

4

5

5

Funds Flow

Information Flow

Reports/MIS

9

50

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Contact details are mentioned.

Thank You

Capacity Building Material

Documents

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