NPS contributions: Will NPS account be closed if minimum contributions are missed?

National Pension System (NPS) is a voluntary subscription program that allows individuals to make contributions to their pension accounts in order to build a pension corpus from which regular income will be provided after retirement. The amount of the pension will depend on the contributions made, the accrual and returns on the investments, and the percentage of the subscriber's corpus used to purchase an annuity plan from any of the Annuity Service Providers appointed by PFRDA.

Here is a look at important FAQs about NPS contributions, on the NPS Trust website.

A subscriber can make any number of contributions without any upper limit of amount through any of the following modes:

· Physical mode – by visiting any of the registered service provider (PoP) and depositing cheque/cash along with the NPS contribution slip.

· Online mode - Web-based (i) login to your Pension Account (ii) online facility provided by PoPs (iii) eNPS platform.

· NPS Mobile Application login

The subscriber's contributions will be invested in accordance with the decisions (asset allocation and pension fund) made and reported to CRA.

· The contributions typically take three working days to reflect in your NPS account.

· Receipt/realization of contribution in service provider's (PoP) bank account

· Upload of details by service provider (PoP) to CRA and fund remittance to Trustee Bank

· Transfer of funds by Trustee Bank to Pension Fund based on CRA instructions

· Investment of funds by Pension Fund and declaration of scheme NAV

· Allocation of units by CRA for the contributed amount

· Reflection of corresponding units in the subscriber’s NPS account

· Subscribers will receive SMS and email confirmations of unit credit in their accounts.

The contributions are invested by Pension Funds according to the investment guidelines prescribed by PFRDA for each asset class.

Asset class E – Equity shares of companies traded in Futures and Options segment

Asset Class C – Corporate Bonds / Debentures which are listed and rated not below A

Asset Class G – Government securities and State Development Loans

Asset Class A – Alternate Assets.

The Annuity Service Provider (ASP) will pay the subscriber's pension based on the Annuity Plan chosen and purchased from the ASP (Insurance Company) and the terms and conditions therein.