Pension Rules Change: Major Overhaul in Pension Regulations, New Rules Effective from October 1st

Pension Rules Change: A significant change is coming to pension rules that will directly impact subscribers of the National Pension System (NPS), Atal Pension Yojana (APY), and the Unified Pension Scheme (UPS). These new regulations have been issued by the Pension Fund Regulatory and Development Authority (PFRDA) and will come into effect from October 1st. The primary objective of this change is to implement a new and transparent fee structure for the services provided by Central Recordkeeping Agencies (CRAs). Let’s delve into the details of this change.

What is the New Fee Structure?

According to PFRDA’s new guidelines, service charges for pension schemes have been revised. This change primarily applies to the Central Recordkeeping Agencies (CRAs), which are responsible for managing subscriber accounts and maintaining records. The old guidelines from June 2020 have been superseded by this new framework, which aims to introduce a more defined and potentially more beneficial fee system for subscribers.

Changes in Charges Across Various Schemes

Let’s take a look at the specific changes for different schemes:

For the Government Sector (NPS and UPS)

• e-PRAN Kit Opening: A charge of ₹18 will now be applicable for opening a new e-PRAN (Permanent Retirement Account Number) kit.
• Physical PRAN Card: If a subscriber wants a physical PRAN card, a fee of ₹40 will be charged.
• Annual Maintenance Charge: An annual maintenance charge of ₹100 per account has been set. However, accounts with a zero balance will not incur any charge.

For Atal Pension Yojana (APY) and NPS-Lite

• PRAN Opening Fee: The fee for opening a new PRAN account for these schemes has been set at ₹15.
• Annual Maintenance Fee: An annual maintenance fee of ₹15 will be charged.

For the Private Sector

For private sector subscribers, the PRAN opening charges are similar to those in the government sector. However, the annual maintenance charge will be based on the corpus in the Tier-I account.

• Zero Balance: No charge will be applied if the account has no funds.
• Balance above ₹50,00,000: If the account balance exceeds ₹50 lakh, a maximum charge of up to ₹500 may be applied.
• Transaction Fee: An important point to note is that there will be no transaction fees across all these schemes, which is a significant relief for subscribers.

Important Information for Subscribers

Subscribers should keep a few things in mind regarding these new rules:

• Maximum Charges: The fees set by PFRDA are the maximum allowable charges. CRAs have the option to charge less or offer negotiated rates.
• Transparency on Websites: All CRAs must clearly display this new fee structure on their websites and apps.
• Future Services: If any new services are introduced in the future, their pricing will be determined with the approval of PFRDA.

These changes are set to open a new chapter for pension subscribers. It is hoped that this will make the entire system more transparent and customer-friendly. If you have invested in any pension scheme, it is crucial for you to be aware of these new charges.