About NPS

NPS Architecture

The National Pension System (NPS) features a robust, unbundled system architecture designed to ensure efficiency, transparency, and cost-effectiveness. Each intermediary within the NPS ecosystem performs a distinct function to help reduce operational and intermediation costs, minimise systemic risks, and eliminate single points of failure.    

This multi-layered architecture of NPS includes the following key entities:

1. NPS Trust    

Constituted by PFRDA to safeguard the pension assets of NPS subscribers. The Trust oversees operational activities and is governed by a Board of Trustees appointed by PFRDA.

2. Central Recordkeeping Agency (CRA)    

Responsible for recordkeeping, administration, and subscriber services. Currently, three CRAs are registered with PFRDA:
•    Protean eGov Technologies Limited
•    KFin Technologies Limited
•    Computer Age Management Services Limited 

3. Pension Funds (PFs)

PFs manage the investment of pension contributions based on PFRDA’s investment guidelines. At present, 10 Pension Funds are registered under NPS.

List of Pension Funds.

4. Trustee Bank (TB)

Provides banking services such as collection, pooling, remittance, and fund reconciliation within NPS. Axis Bank Ltd is currently appointed as the Trustee Bank.

5. Points of Presence (PoPs)

Act as distribution and service channels for NPS in the non-government sector. PoPs facilitate subscriber registration, contributions, and servicing.

List of PoPs.

6. Custodian

Offers custodial and depository services by maintaining Demat accounts in the name of NPS Trust. Deutsche Bank is the current custodian of securities under NPS.

7. Retirement Advisors

Qualified individuals or entities registered with PFRDA to provide NPS advisory services and facilitate distribution of the pension scheme.

8. Annuity Service Providers (ASPs)

Empanelled insurance companies are responsible for providing annuity payouts to subscribers upon exit from NPS.

For detailed guidelines and regulations related to NPS architecture, please refer to the PFRDA regulations.

NPS Benefits

The National Pension System (NPS) offers the following key features and benefits:

• Low Cost - NPS is one of the lowest-cost pension schemes globally, ideal for long-term retirement planning.
• Flexible - Subscribers can choose their Point of Presence (PoP), Central Recordkeeping Agency (CRA), Pension Fund, and asset allocation strategy. These choices can be modified as needed.
• Portable - The NPS account is fully portable across employers and geographic locations, ensuring continuity and convenience.
• Tax Efficient - Tax incentives are available to subscribers under the Income Tax Act, 1961.    
• Optimum Returns - Offers market-linked returns based on the investment options selected by the subscriber or employer.
• Transparent - Provides 24x7 online access to NPS accounts, with regular updates and mandatory public disclosures for full transparency.