New NPS contribution rule: PFRDA reduces timeline of contributions made from July 1; three important things to know

National Pension System (NPS) subscribers have multiple modes for contribution deposit including through Points of Presence (PoPs), eNPS, D-Remit, UPI, UPI QR Code and their employers. The Pension Fund Regulatory and Development Authority (PFRDA) has reduced the timeline for NPS contributions received by Trustee Bank (TB) on any settlement day will now be considered for same-day investment (T+0). Earlier, the timeline was T+ 1. This new timeline for same-day investment will be effective from July 1, 2024, PFRDA stated via a circular issued on June 28, 2024.

Also read: 18 major NPS changes in last 6 months: New online withdrawal facility to changes in NPS transaction statement

Here are three things to know about the new changes.

New NPS contribution rules: How it works

Contributions are placed into the allocated account of the Trustee Bank (TB) after exchanging information with Central Recordkeeping Agencies (CRAs). The Trustee Bank invests contributions received up to the previous day (T) on the next settlement day (T+1).

What is the change

From July 1, 2024, TB and CRAs, contributions received by TB till 11 AM (T) on any settlement day will now be considered for same-day investment. Note that contributions received by TB after 11 AM will be invested on the next day (T+1).

According to the PFRDA circular dated June 26, 2024, “With advancements in technology and a robust system-level interface between TB and CRAs, contributions received by TB till 11 AM (T) on any settlement day will now be considered for same-day investment. This new timeline for same-day investment will be effective from 1st July 2024. Contributions received by TB after 11 AM will be invested on the next day (T+1).”

NPS new rule: Where it applies

The extended timeline for accepting contributions will apply to all types of contributions received by TB from/through Government Nodal Offices, PoPs, eNPS, D-Remit, UPI, etc. D-Remit contributions received by 9:30 AM on any settlement day which are already considered for same-day investment, will also be extended according to the revised timelines of 11 am.

The circular further added, “PoPs, Government Nodal Offices and NPS Trust for eNPS are advised to align their information-sharing systems with CRA and the contribution remittance framework to TB according to the revised timelines in a time-bound manner. This alignment ensures that the benefits of same-day investments are passed on to the subscribers as applicable.”