An employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58 or 50 years. In case of death / disablement, the above restrictions doesn’t apply. One has to submit Form 10D through last employer to claim Pension. This article gives overview of EPS Contribution,Pension from EPS, how much EPS pension would one get,explains how to fill EPS Pension Form 10D to Claim your Pension from EPS.
Overview of Pension from EPS
Employees’ Pension Scheme (EPS) offers pension on disablement, widow pension, and pension for nominees. In 1995 EPS replaced the Family Pension Scheme (FPS) of 1971. When an employee joins an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, 1952 (s)he becomes a member of Employees Provident Fund Scheme (EPF) and Employees’ Pension Scheme (EPS) . Our article Basics of Employee Provident Fund: EPF, EPS, EDLIS explains EPS,EPS in detail.
EPS Contribution, Transfer of EPF and Withdrawal from EPF/EPS
- EPS is applicable to all members who joined EPF after 15.11.1995
- 8.33% of employer’s monthly contribution from the EPF goes to EPS.
- Monthly contribution to EPS is restricted to 8.33% of Rs. 15000 or Rs 1250 p.m.
- Unlike the EPF contribution, EPS part does NOT get any interest.
- On attaining 58 Years of age, a EPF member ceases to be a member of EPS automatically.
- From 25 Apr 2016 one can defer pension upto 60 years with/without contribution
- If you resign before completing 9 years and 6 months of service, you get the withdrawal benefit which depends on your monthly salary and the number of years of service. EPS always rounds up the number of years. So, if you worked for 4 years and 7 months, it will be considered as 5 years.
- A member who has completed 58 years of / claimant on behalf of a deceased member who died after the age of 58 years without completing the eligible service of 10 years should apply for Withdrawal Benefit through Form 10C.
What happens to pension when you transfer a job?
Technically, EPS and EPF are not linked . You can withdraw the EPF once you leave the organization after filling Form 19. But when you transfer the EPF using EPF Form 13, then EPS is also transferred. It’s amount is not reflected in the passbook. But period of transfer is recorded.
Pension from EPS
- An employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58 or 50 years. This is Called superannuation
- If an employee is a member of Employees’ Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. He will not receive any pension.
- If employee is a member of Employees’ Family Pension Scheme and has left employment at 48 years of age with 12 years of service to his/her credit. He/She will receive pension on reaching age of 58 years.An employee can receive the pension under EPS only after rendering a minimum service of 10 years.
- From 25 Apr 2016 one can defer pension upto 60 years with/without contribution
- No pension is payable before the age of 50 years.
- Early pension after 50 years but before the age of 58 years is subject to discounting factor for every year falling short of 58 years. This is called as Before superannuation and one should not be in service.
- In case of death / disablement, the above restrictions doesn’t apply.
- Death can be while in service or while not in service.
- Permanent disability means totally unfit for the employment which the member was doing at the time of such disablement
- If member is alive, pension to member
- If member is not alive, Pension to to spouse and two children below 25 years of age
- For pension, withdrawal benefit, scheme certificate etc. application should be through ex-employer.
- For pension, Form 10D is to be used. For withdrawal benefit & scheme certificate, fill Form 10 C.
- Claim Form 10D should be submitted in two copies and in three copies(triplicates) if pension is to be drawn in other Region/Sub Region.
Lifelong pension is available to the member. Upon his death, members of the family are entitled for the pension. Family means employees’ spouse and children below 25 yrs. of age. I
- In case of death of member having family, pension is payable to (1) the spouse and (2) two children below 25 years of age. When a child reaches 25 years of age, the third child below 25 yrs of age will be given pension and so on.
- If the child is disabled, he may get pension till his death.
- In any case, only 2 children will receive pension at a time.
- If member does not have family, pension is payable to single nominated person. One can change one nomination anytime within the framework of rules for such nomination. In other words if one has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes
- If not nominated and having dependent parent, pension is payable first to Father and then on father’s death to Mother.
- No pension is payable before the age of 50 years .
- You can opt for pension after 50 but will have to forgo 4% for every year before you turn 58.
- One can apply for EPS Pension from a date immediately following the date of completion of 58 years of age notwithstanding that the person has retired or
ceased to be in the employment before that date.
- Pension depends on number of years of your service.
- Maximum Pension one can get is Rs 7,500 per month.
- The Government has since Sep 2014 implemented minimum pension of Rs. 1000 per month to the member/disabled/widow/widower/ parent/nominee pensioners and Rs. 250 per month for children pensioners and Rs. 750 per month to orphan pensioners
- The EPFO also suspended the enhanced pension payment to widows, children and orphans under the scheme. Under the modified scheme, the minimum monthly pension for widows has been fixed at Rs 1,000 and for children at Rs 250 per month. Similarly, the minimum pension entitlement for orphans has been fixed at Rs 750 per month.
- Maximum service for the calculation of service is 35 years.
- The fraction of service for six months or more is treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded upto 10 years.
- If no wage is earned for a certain period, that period is to be deducted from the service, as there will be no contribution to Pension Fund.
- No pensioner can receive more than one EPF Pension. So if you have worked in multiple organizations you meed to consolidate all your EPS and then apply for EPS Pension. If you have multiple Scheme Certificate you need to submit all of those.
- EPS Pension is taxable and has to be considered under the head Income from Salaries.
Applying For EPS pension
How to apply for the EPS pension?
- For pension, EPS Pension Form 10D should be filled.
- The application should be forwarded through the establishment in which the member last served/died. The establishment should furnish the certificate and wage particulars duly attested by the authorized officer.
- if the establishment is closed, the application should be forwarded through Magistrate/Gazetted Officer/Bank Manager/any other authorized officer as may be approved by the Commissioner.
- With Form 10D, you will be required to attach the bank account proof [copy of passbook/canceled cheque] . For this, you must have an account in the bank, which is designated by EPFO for pension facility. For the details of such bank, you can visit your nearby EPFO.
- Photographs of your family including you, your spouse and children below age of 25 yrs. Previously EPFO asks for 3 photographs, but now they are taking 4 photographs.
- Age proof of the member and family, as in the photograph.
- Any scheme certificate, issued earlier by any EPFO.
- All the above documents and form should be attested by your employer, or any gazetted officer.
- The form should be submitted in duplicate for home state and triplicate for out of state.
How long does it take to get Pension?
The claims, complete in all respects submitted along with the requisite documents shall be settled and benefit amount paid to the beneficiaries within thirty days from the date of its receipt by the Commissioner. If there is any deficiency in the claim, the same shall be recorded in writing and communicated to the applicant within thirty days from the date of receipt of such application. In case the Commissioner fails without sufficient cause to settle a claim complete in all respects within thirty days,the Commissioner shall be liable for the delay beyond the said period and penal interest at the rate of 12 per cent per annum may be charged on the benefit amount and the same may be deducted from the salary of the Commissioner.] 40. Ins. by GSR 376 dated the 27th October, 1997 (w.e.f. 8th November 1997)
How to Fill EPS Form 10D to claim Pension from EPS
This explains how to fill Form 10D to claim Pension from EPS.
1 By whom is pension claimed?
- MEMBER : one who has been contributing to EPF and EPS.
- WIDOW/WIDOWER : wife/husband of someone who was contributing to EPF and EPS.
- MAJOR : Child above 18 years of one who has been contributing to EPF and EPS.
- ORPHAN :
- GUARDIAN : if child of one who has been contributing to EPF and EPS is less than 18 then the Guardian.
- NOMINEE : Nominee mentioned by member in EPF Nomination Form
- DEPENDENT PARENT : Father/mother. If member has not nominated and has dependent parent, pension is payable first to Father and then on father’s death to Mother.
2 Type of Pension Claimed
- SUPERANNUATION PENSION :By member on attaining 58 years age, whether in service or not
- REDUCED PENSION: By member after the age of 50 years but below 58 years and having left service
- DISABLEMENT PENSION: By member on leaving service on account of total and permanent disablement.
- WIDOW & CHILDREN PENSION: By family (spouse and children) on death of the Member.
- ORPHAN PENSION: By surviving son/daughter (of age up to 25 years as on date of death of member/spouse whichever is later) on the death or remarriage of the deceased member.
- NOMINEE PENSION: By nominee declared by the Member through his/her Form 2(R) in case the member had no family (Spouse and children).
- DEPENDENT PARENT: By the dependent father and mother of the deceased member who died without a family (spouse and children) and failed to nominate a person for pension.
- The name must be mentioned in BLOCK LETTERS.
- Marital Status: Whether married/unmarried/widow/widower/Divorcee.
- Date of Birth: In dd/mm/yyyy format.
- Father’s Name and in case of a married female member, Husband’s name in BLOCK LETTERS.
4. EPF Account Number: The account number should have the Region Code (two alphabets), Office Code (three alphabets) code number (maximum 7 digits), extension (sub code, if any, maximum three characters) and account number (maximum 7 digits). The region codes have changed after creation of the multiple regions in some states, namely Maharashtra, Tamil Nadu, Karnataka, West Bengal, Punjab, Gujarat, Andhra Pradesh, Uttar Pradesh, Haryana and Delhi. For getting the correct Region and Office Codes, please visit Establishment Search facility provided under link for Employees through the website epfindia.gov.in
5. Name and Address of the Establishment where the member was last employed.
6. Date of Leaving service Indicate the actual date of leaving service in date/month/year form. If one has attained 58 years and continues to be in service. In such case indicate,” still in service”.
7. Reason of Leaving Service: If the reason for leaving service was on account of total and permanent disablement, as indicated by the establishment to the P.F. Office through Form 10/Form 5 (PS)/ECR (Electronic Challan cum Return) then only the member is entitled for Disablement Pension. In all other cases the actual reason for leaving service may be given.
8. Address for communication :Your address for communication
8A In case of reduced pension (opted date for commencement of pension.) If the member has left service before 58 years of age, has not completed 58 years age as on date of application and is ready for drawing reduced pension, he/she should mention the date from which /she wishes to get pension. The opted date cannot be prior to date of attaining 50 years age and date of leaving service.
Commutation and Return of Capital in EPS Pension Form 10D
Commutation and Return of Capital on superannuation was discontinued from 26-Sep-2008, (Notification Number GSR 688 (E) dated 26- 09-2008) in an attempt to curb the EPS deficit. So fill Sl. No.9, 10 and 11 of the form only if the date of start of member pension is before 26/09/2008 (cases where the application is being filed belatedly but the member is due for pension from such date)
Under the commutation of pension scheme, a retiring employee had an option to receive nearly 30% of his pension corpus in one go and draw monthly pension from his remaining corpus. Commutation is the option to receive a capital sum today instead of receiving a monthly pension for rest of your life. Rate of commutation is upto 1/3rd of the Original Pension. Suppose the original pension is Rs.600, the commutation value is Rs.20,000. On commutation, the pension payable will be Rs. 400,
Return of capital on superannuation was the option to cash out the entire pension corpus i.e , employees had the option to get one-time cash by foregoing their monthly pension.
Family Details in EPS Pension Form 10D
As mentioned earlier Lifelong pension is available to the member. Upon his death, members of the family are entitled for the pension. This section is about details of the family. While the member pension is approved, the pension amount payable to the family (spouse/children) are also decided and in case of the death of the member as pensioner, the spouse/children/orphan will start getting the pension on submission of the death certificate and there will not be any requirement of processing of the widow/children/orphan pension again. In case of a deceased member, it has to be filled by the spouse/children.
The list of surviving family members of the Member, covering his spouse, all children should be furnished. The particulars of Guardian should be given in respect of each minor child, as of the date of application. In support of the age of children, age proof certificate obtained from the school or Registrar of Birth-death or E.S.I. Record, or Municipal authorities should be enclosed. In the case of Guardian other than natural guardian, a Guardianship Certificate should be enclosed.
13 Date of Death of member(if applicable). Applicable only in case the member is not alive. In support of the date of death, death Certificate should be enclosed.
Bank Details for EPS Pension in EPS Pension Form 10D
Pension is payable through any branch of certain Banks depending on place where the pensioner wants to receive pension. Hence Saving Bank Accounts should be opened only in the said Bank(s). The member, the spouse and children (minor or major) should also open S.B. A/cs in the same branch of the Bank. In case the claim is preferred by spouse, he/ she should give his/her S.B.A/c No. and also separate S.B.A/c No.s in respect of each child. S.B. A/c No.s of children who are below the age of 25 years (as on date of death of the member) should be given. On behalf of minor child, S.B. A/c opened in the name of minor and operated by the guardian of the minor and A/c No. should be given.
Whenever pension is opted from a place beyond the jurisdiction of the region in which the member was last employed, he should ascertain the name of the designated bank applicable in that Region and open a S.B. A/C therein. On sanction of Pension, intimation will be sent to the pensioner to contact the bank. The list of Banks in which provision has been made for the retired employees drawing pension under Employees’ Provident Fund Organisation (EPFO) as per Press Information Bureau Aug 2015 is given below
Nomination Details and Scheme Certificates in EPS Pension Form 10D
In case of death of the member before attaining 58 years without leaving any eligible family members to receive the pension, the nominee as appointed by the member through the From 2 (Revised) already sent to the P.F. Office may apply, giving his particulars against this column. In case the member had no family and had died before appoint a nominee for pension, his/her dependent parent (father & mother) may apply for pension, pension will be paid to father and on his death to mother
As mentioned earlier For EPS, if the service period is less than 10 years, you’ve option to either withdraw your corpus or get it transferred by obtaining a ‘Scheme Certificate’. if you have obtained Scheme Certificate then you have to enter the details in this section.
16. If pension is being drawn under E.P.S, 1995 If the applicant is already receiving pension under Employees’ Pension Scheme, 1995 claim pension, the details should be furnished against this column.
List of documents to be submitted with EPS Pension Form 10D
17. List of documents to be enclosed along with EPS Pension Form 10D
- Descriptive role of pensioner and his/her specimen signature/Thumb impression (in duplicate); (Form is enclosed with the Claim Form)
- Photographs: The photographs should be attested by the employer or his authorized official, indicating the person, whom the photograph relates to and also the P.F. Account No. of the member, written on the verse and placed in a separate envelope.
- 3 pass-port size photographs If claimed by the member Joint photo with spouse, there is no need to send photograph of the children.
- If claimed by widow/widower the photograph should be sent for widow/widower and his/her two children (below 25 years) separately.
- In the case of a member, who is permanently and totally disabled during the employment, he/she should undergo a Medical Examination before the Medical Board advised by the E.P.F. Office. However, the disablement should occur while in employment.
- Cancelled cheque of the Bank where one wants to get Pension.
Employer Approval in EPS Pension Form 10D
The application should be forwarded through the establishment in which the member last served/died. The establishment should furnish the certificate and wage particulars duly attested by the authorized officer.
List of Banks where one can get EPS Pension
The list of Banks in which provision has been made for the retired employees drawing pension under Employees’ Provident Fund Organisation (EPFO) as per Press Information Bureau Aug 2015 is given below
|S.No.||EPFO Regional Office||Pension Disbursing Banks|
|1||Delhi (North)||PNB, SBI, IB, UBI, HDFC, ICICI, AXIS|
|2||Delhi (South)||PNB, SBI, IB, UBI, HDFC, ICICI, AXIS|
|4||Gurgaon||PNB, SBI, HDFC, ICICI, AXIS|
|5||Faridabad||PNB, SBI, HDFC, ICICI, AXIS|
|6||Jaipur||PNB, Thar Gramin Bank, HDFC, ICICI, AXIS, SBBJ|
|7||Shimla||PNB, SBI, AXIS|
|8||Ludhiana||PNB, SBI, HDFC, AXIS|
|9||Chandigarh||PNB, SBI, HDFC, AXIS, ICICI|
|10||Bihar||PNB, BOI, HDFC|
|12||Kanpur||PNB, SBI, HDFC, ICICI, AXIS|
|13||Hyderabad||SBI, UBI, AB, HDFC, AXIS, ICICI|
|14||Guntur||SBI, AB, HDFC, AXIS, ICICI|
|15||Nizamabad||SBI, SY. BANK, Gramin BANK, UBI, AB, AXIS|
|16||Bhuvneshwer||SBI, BOI, UCO Bank, HDFC, AXIS, ICICI|
|17||Bangalore||SBI, CANARA, SY. BANK, CORP. BANK, VIJAYA BANK, HDFC, AXIS, ICICI|
|18||Goa||SBI, BOI, HDFC|
|19||Gulbarga||SBI, CANARA, SY. BANK, ICICI,CORP. BANK|
|20||Mangalore||SBI, CANARA, SY. BANK, CORP. BANK, VIJAYA BANK, AXIS|
|21||Peenya||SBI, CANARA BANK, SY. BANK, CORP. BANK, HDFC, AXIS, ICICI|
|22||Coimbatore||SBI, IB, IOB, HDFC, AXIS, ICICI|
|23||Kerala||PNB, SBI, IB, IOB, CANARA, SY. BANK, FED.BANK, HDFC, AXIS, ICICI, North Malabar Gramin Bank, SBT|
|24||Madurai||SBI, IB, IOB, HDFC, AXIS, ICICI|
|25||Tambram||SBI, IB, IOB, HDFC, AXIS, ICICI|
|26||Chennai||SBI, IB, IOB, HDFC, AXIS, ICICI|
|27||Ranchi||PNB, BOI, UBI, HDFC, AXIS, ICICI|
|28||Jalpaiguri||SBI, UBI, UCO, CBI, UBKG BANK|
|29||Kolkata||PNB, UBI, HDFC, AXIS,ICICI|
|30||Guwahati||SBI, HDFC, AXIS, ICICI|
|31||Raipur||PNB, SBI, HDFC, AXIS, ICICI, CBI,|
|32||Bandra||PNB, SBI, BOI, HDFC, AXIS, ICICI, BOM, IB|
|33||Thane||PNB, SBI, BOI, HDFC, AXIS, ICICI|
|34||Kandivali||PNB, SBI, BOI, HDFC, AXIS,ICICI|
|35||Pune||PNB, SBI, BOI, HDFC, AXIS, ICICI, BOM|
|36||Nagpur||PNB, SBI, BOI, HDFC, AXIS, ICICI|
|37||Ahemdabad||SBI, DENA, HDFC|
|38||Surat||SBI, DENA, HDFC, AXIS, ICICI|
|39||Vadodara||SBI, DENA, HDFC|
|40||Indore||PNB, SBI, HDFC, AXIS, ICICI|
Download Form 10D
LIC has announced its bonus for the year 2016-17 as it usually does in Sep along with LIC’s One Time Diamond Jubilee Bonus. Bonus is a part of the guaranteed returns that LIC offers. This article will give Overview of LIC Bonus, LIC’s One Time Diamond Jubilee Bonus, the meaning of bonus, its types, how it is calculated and comparison of LIC bonuses with private companies.
Overview of LIC Bonus
Every year in Sep LIC,Actuarial department does the valuation, and declares the bonus rates ,Simple Reversionary Bonus, Final additional bonus (FAB) and Loyalty addition (LA). As per the LIC Act, it shares 95% of its profit with the policyholders and the rest with the government as its owner. In 2014-15, LIC paid Rs 34,283 crore as regular annual bonus to the policyholders. In 2015-16 LIC had paid surplus of Rs 2,502 crore to the government up from Rs 1,803 crore.
Life Insurance Corporation of India has also declared the One time Diamond Jubilee Bonus on its 60th anniversary
These bonus rates are applicable for new policies between 01/04/2015 to 31/03/2016 and in force as on 31/03/2016. It will be applicable to policies resulting from claims by death or maturity (including those discounted within one year of maturity) or surrendered on or after 01/01/2016. Please note that the bonus are paid as per the policy conditions and depend on the Sum assured and policy term. The bonus is reversed back to the policy, and the amount will be paid at maturity.
LIC’s One Time Diamond Jubilee Bonus
As LIC is celebrating its 60th anniversary, it has also declared a one-time diamond jubilee bonus in addition to the simple reversionary bonus, final addition bonus and loyalty bonus. As per the plan, the corporation will pay anywhere between Rs 5 to Rs 60 per Rs 1,000 sum assured, depending on the tenor of the policy. The old policy holder gets more jubilee bonus than the new policy holder.
- The bonus will be eligible for policies in force as of March 31, 2016, and existing on or after September 1, 2016.
- This onetime bonus will be paid over and above the annual payout of its profit sharing. Holders of money back, whole life and endowment with profit plans policies benefit. With this bonus, old policies may be revived.
- Even policies which have lapsed as of March 31, 2016 will be eligible provided they are subsequently revived
- The move will benefit over 29 crore individual policyholders of the national insurer as well as over 12 lakh group policyholders.
- LIC Diamond Jubliee Bonus converts into Rs. 500 for a policyholder with an assured sum of Rs. 1,00,000, or Rs. 6,000, depending on the duration of the policy, meaning older the policy or closer to the maturity date, maximum the bonus. The bonus amount will increase by Rs. 500 each for every older policy with a five-year gap. For example, a policy that started in April 2010 will get Rs. 1,000 for every Rs. 1 lakh of assured sum between April 1, 2010 and March 31, 2016.
- A policyholder will be eligible for jubilee bonus if it policy is “with profit” and fulfills other conditions like that for a regular reversionary bonus.
- Policies that are entitled for guaranteed additional bonus will not be eligible for diamond jubilee bonus.
|Policy subscription date||Bonus rate
(per 1000 sum assured)
|1st April 2011 – 31st March 2016||5|
|1st April 2006 – 31st March 2011||10|
|1st April 2001 – 31st March 2006||15|
|1st April 1996 – 31st March 2001||25|
|1st April 1991- 31st March 2006||35|
|1st April 1986- 31st March 1991||45|
|Upto 31st march 1986||60|
LIC Special Bonus
On the occasion a Special Golden Jubilee,on the 1st September, 2005, Reversionary Bonus ranging from Rs. 5 to Rs. 50 per thousand sum assured was declared by LIC. Ref
The Life Insurance Corporation of India (LIC) had declared higher bonus rates for the 2011-12 year under seven of its ‘With Profit Plans’ and Loyalty Additions under seven other plans, on the occasion of its 55th anniversary celebrations. The bonus was declared in seven plans, namely, Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharati I and Jeevan Pramukh, all in the range of Rs. 1 – Rs. 6 per thousand sum assured.
What is Bonus?
Life insurance companies distribute their annual profits to the policy holders. This profit is known as bonus. Various types of bonuses are distributed during a year. Our article Bonus of Life Insurance Policies explains bonus in detail.
Who is eligible for a bonus?
Nowadays, medical costs have increased exorbitantly. Even though the cost of healthcare may create immense financial burden on individuals, they are slowly realizing the importance of health insurance.
Devised as a safety net, health plans act as a protection in case of any unforeseen medical emergencies. These go long towards ensuring that you can focus on recovery and are not faced with a financial crunch during your illness. These plans help make quality healthcare affordable and accessible for you.
Importance of being covered
Health plans act as a blanket that insulates you and your loved ones during times of need. Therefore, it is important to avail of a health insurance policy that fits all your requirements and provides you with adequate health cover.
Medical emergencies are unpredictable and generally leave behind staggering medical bills. There is also a possibility of you being diagnosed with cardiac and other disorders due to the highly stressful lifestyle. Illness like diabetes or cancer may cause a strain on your pocket. However, this can easily be avoided by opting for health insurance plans.
Purchasing health cover allows you to be at peace as you and your family are adequately covered. Additionally, due to the facilities offered by these plans, you are more likely to undergo routine medical examinations which help detect illnesses at an early stage. Select a health insurance policy that provides you with a comprehensive cover in terms of your requirements and not the one that has provisions for all illnesses under the sun. Choosing the latter may land you with another hole in your pocket which is not even beneficial.
Depending on the insurer and the specific policy features, your plan may cover the cost of doctor fees, ambulance charges, and post hospitalization fees in addition to hospitalization charges.
Under the cashless facility offered under certain health covers, you can undergo emergency medical treatment and the treatment cost is directly borne by the insurer. This comes in great use during emergencies when you may be able to afford quality healthcare but need immediate attention. Treatment has to be undergone at any of the insurer’s network of affiliated hospitals.
Co-pay policies allow you to bear the costs along with the insurance provider. The allocation of costs is decided under the health plan and while the insurer pays the larger part, a certain percentage has to be paid by you.
Reimbursement works on the model wherein you make the payments initially and thereafter, submit the bills to the insurer. After your bills are successfully cleared, you receive the reimbursement amount from the insurer.
At a younger age, you are more likely to enjoy lower premiums. As you grow older, your likelihood of contracting diseases like diabetes, blood pressure, and cholesterol increases. Insurers, therefore offer plans with higher premiums to older people. It is wiser to start early as it will greatly benefit you in terms of lower insurance premiums.
When it comes to family health insurance plans, experts recommend availing of these plans at the initial stages when your children are young. The family plans are devised with regards to the oldest member of the family. Therefore, if you have older parents or senior citizens, you are more likely to be required to pay severely hiked premiums.
While health insurance policies offer comprehensive care, they also have several exclusions which include dental care, maternity care, and alternative medical practices like homeopathy and naturopathy.
While availing of any health covers, always review the policy document carefully. Moreover, while purchasing insurance online, maintain a saved copy on the desktop or take a print and preserve it. Consider your requirements, attempt to foresee you and your family’s medical conditions, and avail of plans which offer coverage that suits your requirements.
If a employee contributing to NPS changes his job, what will happen to his NPS account? This article explains how to transfer NPS when one shifts office. It explains various sectors of NPS,Nodal Office, Shift from EPF to NPS, Shifting NPS using Form ISS.
NPS account is portable
NPS is a pension system which offers financial security after retirement to a person. During the service life of an employee, only one NPS account is maintained irrespective of change of employer. You can shift from one sector to another,from one State Government service to another State Government service, from Central Government to Corporate and vice-versa etc. So, if you opened account as Central Government Employee and quit your Government Job, you can still continue under All Citizens model by making contribution of Rs 1,000 to keep your NPS account active. You do not have to quit NPS when you quit your job or shift to an employer which does not offer NPS.
Permanent retirement account number (PRAN) is a unique number allotted to a National Pension System (NPS) subscriber. PRAN or the account is portable and can be moved even if a government servant moves to the private sector. You can have just 1 PRAN just like you can have only one Permanent Account Number(PAN). So You can use the same PRAN across different Government departments, state governments, employers or even after changings job.
Various sectors or Models of NPS
Let’s go over the sectors or the models of National Pension Scheme. Currently, NPS and APY together have more than One Crore subscribers with total Asset Under Management (AUM) of more than Rs.1 lakh crore.
- Government Sector:
- Central Government : From 1 Jan 2004 Government made it mandatory for new government employees (except armed forces) to contribute to National Pension Scheme with matching contribution by government
- State Government: NPS is applicable to all the employees of State Governments, State Autonomous Bodies joining services after the date of notification by the respective State Governments. All state governments gradually adopted the NPS. Tamil Nadu had signed to shift their employees to the NPS in April 2003, Maharashtra signed up in November 2005,Kerala finally agreed to join the NPS from 2013-14.
- Corporate Sector: Corporate National Pension Scheme (NPS) was launched in December 2011 by PFRDA (Pension Fund Regulatory Authority). Just like a Provident Fund, NPS is a contribution scheme through which both the employer as well as the employee can build the employees’ pension wealth. The biggest advantage is the tax benefit up to 10% deduction on the Basic Pay+DA of the employer’s contribution on behalf of the employees. This is over and above Rs 1,50,000 benefit under Section 80 C, which is applicable to the employee’s contribution to the NPS kitty. Even the employer can claim tax benefit for its contribution by showing it as business expense in the profit and loss account.
- All Citizens Sector: NPS has been made available to every Indian Citizen from 1st May 2009 on a voluntary basis. All citizens of India between the age of 18 and 60 years as on the date of submission of his application to Point of Presence (POP) / Point of Presence-Service Provider (POP-SP) can join NPS.
- NPS Lite or APY or UOS( Unorganized sector)
- NPS Lite or The Swavalamban Scheme is to provide the retirement benefit for unorganized sector. Under this scheme, the Govt. of India will contribute Rs.1000 per year,for 5 years, to every NPS-Swavalamban account provided the contribution is between Rs.1000 to Rs.12000 per year. The people forming part of this low income groups will be represented through their organisations known as Aggregators who would facilitate in subscriber registration, transfer of pension contributions and subscriber maintenance functions. Subscribers in the age group of 18 to 60 can join NPS – Lite through the aggregator and contribute till the age of 60.
- From Jun 1 2015 Atal Pension Yojana (APY), replaced Swavalamban Yojana NPS Lite. The existing subscribers of Swavalamban Scheme were automatically migrated to APY, unless they opt out. We have covered the scheme in detail in our article Atal Pension Yojna
What is Nodal office of NPS?
PFRDA has appointed National Securities Depository Limited (NSDL) as the Central Record Keeping Agency (CRA) to maintain the records of contribution and its deployment in various pension fund schemes for the employees. The records of the contribution of each employee will be kept in an account known as the Permanent Retirement Account which will be identified by a Permanent Retirement Account Number (PRAN).
Government offices like DTO and DDO or offices equivalent thereof which will interact with CRA on behalf of the Subscriber are collectively referred as Nodal Office. CRA-FC is Facilitation Centre appointed by CRA to facilitate Nodal Offices to submit applications for allotment of PRAN and application for change in signature and photograph of the subscriber
- Nodal offices under Central Government include the Principal Accounts Office (PrAO), Pay and Accounts Office (PAO) and Drawing & Disbursing Office (DDO) under the Central Government or analogous offices .
- Nodal offices under the State Government include the Directorate of Treasuries and Accounts (DTA), District Treasury Offices (DTO) and Drawing & Disbursing Office (DDO) .
Nodal Offices are identified by a unique number, i.e., Pr.AO /PAO/ DDO registration number that is allotted to them by the CRA on successful registration.
Can I shift my NPS account to eNPS?
Unfortunately, you cannot port your NPS account to eNPS i.e. eNPS cannot be your target PoP when you are shifting. You must open account using eNPS portal for it to be your PoP. But you can contribute using eNPS.
On Shifting Jobs
Our parents(mostly fathers) worked in the same or at most two jobs in one career, they retired on their provident funds. But now people hop from one job to the other looking for better and lucrative job opportunities. But to ensure a smooth financial transition one needs to take care of our salary bank account, Tax computation, Employee Provident Fund(EPF), Health insurance etc. Our articles Changing Jobs:Take Care Of Bank Account,Tax Liability focuses on exploring what to do with Salary Bank Account, Tax liability when ones switch jobs.
Changing jobs often leads to a situation where an individual gets tax exemptions twice from his earlier employer as well as from his new employer. Exemptions and Tax Liability form an important consideration while switching jobs. Making a job switch in the middle of the year involves making sure that the deductions and exemptions regarding tax liability are made only once. Our article Changing Jobs and Tax, Form 12B explains it in detail.
Shifting from EPF to NPS
The proposal to switch from EPF to NPS was announced in 2015 budget. A legislation to amend the Employees’ Provident Fund & Miscellaneous Provisions Act has already been framed and is lying with the Law Ministry. Till the move becomes reality one would either have to withdraw money from EPF or let EPF account continue without any contribution and let EPF will earn interest.
The amendments allows EPF subscribers to make a one-time switch to the NPS. Within 30 days of applying, the entire balance in his EPF account will be transferred to the NPS. Opting for the NPS would also mean the individual exits from Employees Deposit Linked Insurance as well as the Employees’ Pension Scheme (EPS). The Bill is silent on what this means for the amount mandatorily deducted from the employer’s contribution and put into the EPS.
But the best part about the proposal is , the employee will have a one-time chance to return to the EPF fold. However, on rejoining the EPF, the subscriber will be treated as a new entrant and will not be eligible for benefits he might have accumulated in his previous tenure in the EPF. Also, after this ghar wapsi, the subscriber will not have the option to go back to the NPS.
Shifting NPS within the Central Government/ a State Government
In case a subscriber shifts within the Central Government or a State Government then there is just change of Nodal office i.e. from one PrAO/DTA/PAO/DTO/DDO or to another PrAO/DTA/PAO/DTO/DDO then the subscriber need not submit any separate request. For shifting of NPS within Government sector, the Subscriber is required to intimate his PRAN to the target (new) office with whom he/she will be associated after shifting. The new office will facilitate shifting in the CRA system by uploading the NPS contribution. PRAN will get associated to new office in the CRA system on successful credit of the monthly NPS contribution. Subsequently, the new office is required to update Subscriber’s employment details in the CRA system.
Shifting NPS using Form ISS
A subscriber can shift from one sector to another sector or from one office to another office with the same PRAN e.g. from Central Government (CG) to State Government (SG) or from one department to another, etc. For most of the cases when one needs to Shift NPS one needs to submit Inter Sector Shift (ISS) Form . It can be downloaded from npscra.nsdl.co.in or Click Here or you can get it from an existing point of presence of the service provider (POP-SP).
- Fill in complete details of the shift you are making ex: from State Govt to State Govt or from Govt to Corporate etc, discussed in detail later.
- Attached appropriate documents
- Form with supporting documents has to be submitted to target POP -SP.
- A stamped acknowledgement is given.
- Once details are verified, the change is communicated to the subscriber.
Before shifting Please note
- PRAN should be active.
- Details such as PRAN number, employer information and salary information must be filled correctly as these are recorded in the NPS system.
Shifting NPS Form ISS (Inter Sector Shift)
- Name and address, PRAN details, details of the existing and new POPSP need to be provided in the form.
- Please quote the correct PRAN and attach a copy of the PRAN Card
- Please provide Details of the DDO / POP-SP with which the PRAN is currently associated.
- Please provide Details of the DDO / POP-SP with which the PRAN will be associated.
- Sector for ‘Existing PRAN association’ and ‘Target PRAN association’ can be the same only if a subscriber is shifting from one State Government to another State Government
Declaration to be filled by subscribers across all sectors. On successful verification of the change request form, POP-SP shall accept the same and shall issue a 17 digit Receipt Number as an acknowledgement to the subscriber. The nomenclature of the receipt
- First 2 digits (from left) – Type of request (19 for Subscriber shifting)
- Next 7 digits – Registration Number of POP-SP e.g., 6000002
- Next 8 digits – Running sequence number eg.00000001
- For Example: 17 digit receipt number will be “19600000200000001”
POP-SP shall handover the acknowledgement to the subscriber as receipt of the acceptance of the request. The POP-SP shall affix the seal as well as the user shall sign the acknowledgement before providing the same to the subscriber.
Instructions and Documents that one needs to provide are shown in image below:
Shifting NPS Between State Government and Central Government
For shifting PRAN from one sector to another or from one State Government to another State Government, the subscriber is required to submit Form ISS-1 to the target Nodal Office i.e. to the Nodal Office with whom he/she will be associated after shifting. The target Nodal Office initiates the shifting of PRAN along with accumulated NPS contributions under the PRAN in the CRA system.
- Download Form ISS-1(Inter Sector Shifting form). To Download Click Here
- Fill in complete details and attach documents
- Submit the form to your Target Nodal Office (i.e. Pay & Accounts Officer/ Drawing & Disbursing Officer)
Shifting NPS to Central Government or State Govt
Subscribers shifting to central /state government need to furnish employment details including salary and department involved. The information needs to be attested by employer. Bank details have to be provided with cancelled cheque.
The Government of India or a Government of States in India classifies public employees into Group A (Gazetted/Executive), B (Gazetted), B (Non-Gazetted), C and D. This classification is based on the recommendations of 6th CPC.
Shifting NPS to UOS or Citizen Sector
In case, the subscriber is shifting from UOS to Central or State government, the process remains the same as in Shifting NPS Between State Government and Central Government. Internally The Swavalamban Flag (even if already activated) will not be applicable in Government Sector. Image below shows additional information required when one needs to Shift NPS to Citizen or Unorganised Sector.
Shifting NPS to Corporate Sector
The subscriber will submit the duly filled form for shifting along with a copy of the PRAN card to the target POP/POP-SP. Image below shows additional information required when one needs to Shift NPS Corporate Sector.
- Subscribers have to provide employment, bank and PAN details.
- They also have to choose PFM and investment option.
- Understanding National Pension Scheme – NPS
- eNPS : Open NPS account online, contribute to NPS online
- Should you Invest in NPS the National Pension Scheme for additional 50,000 and save tax
- Saving For Retirement : Pension Plans,NPS,EPF,PPF
- Tax saving options : 80C,80CCC,80CCD,80D,80U,80E,24
- Tax Planning Traps To Avoid
- Returns of NPS
If you are an investor seeking good returns with little tension of market volatility and the associated risks, balanced funds are for you.Balanced Mutual funds are mixed or hybrid investment schemes that bridge the gap between the riskier equity market and the relatively safer debt market. Steady returns and equity fund-like tax treatment have made them popular. This article explains what are Balanced Mutual Funds, How do Balanced Mutual Funds work, How do Balanced Mutual Funds compare with Equity Funds,Debt Funds, Picking a Balanced Mutual Fund.
Balanced Mutual Funds
What are Hybrid Funds?
Some mutual funds only own stocks. These are called equity funds. Some mutual funds only own bonds. These are called bond funds or fixed income funds. Some mutual funds own both stocks and bonds. These are called hybrid funds or blended funds. Hybrid funds combine different asset classes, such as stocks and bonds, to help investors leverage the high returns from equities over time while also benefiting from the steadier, but lower returns from debt.
What are Types of Hybrid Funds?
- Equity hybrid funds,popularly called Balanced funds, for example, offer more than 65 per cent exposure to equity, and the rest to debt. Examples of Balanced Funds are ICICI Prudential Balanced Advantage Fund, HDFC Prudence Fund, Tata Balanced Fund, SBI Magnum Balanced Fund.
- Debt hybrid funds invest at least 75 per cent funds in debt and the rest in equity.There are a number of debt-oriented hybrid funds that offer a combination of equity, debt and gold, such as Religare MIP Plus, Fidelity Children’s Plan, Taurus MIP Advantage, Axis Triple Advantage etc.
- Dynamic asset-allocation funds, where the equity proportion can swing from 35 to 70 per cent depending on market conditions. If equity prices are too high, dynamic asset-allocation funds drop the equity exposure to as low as 35 per cent. On the other hand, if equity valuations are too low, such funds increase the equity component to as much as 75 per cent.
Why are Balanced Mutual Funds important?
Balanced funds combine the power of equities (shares) and the stability of debt market instruments (fixed return investments like bonds) and provide both income and capital appreciation while avoiding excessive risk. Balanced Funds invest 65% – 80% in equity securities and the remaining in debt securities.
- Balanced funds continuously rebalance their portfolios to ensure that the broad asset allocation is not disturbed. Therefore, the profits earned from the stock markets are en cashed and invested in low risk instruments.
- Managing separate debt and equity portfolios could be a tedious task and would involve churning costs and tax implications. Further, one may not be able to tactically adjust allocations to market movements. This helps the investor in maintaining the appropriate asset mix, without getting into the hassles of re balancing the portfolio on their own.
- The benefit of having a balanced fund became apparent when the markets plummeted in 2008 — balanced funds, due to their exposure to debt investments, suffered lesser losses compared to equity funds.
Balanced Mutual Funds have been around for some time now, but investors have recently warmed up to them. Data from ValueResearchOnline show that investors pumped in Rs 28,484 crore into balanced funds in FY16, compared to Rs 15,417 crore in FY15, a whopping 84 per cent increase. Balanced funds offer benefits of asset allocation model in a single structure. These funds offer the benefits of both worlds as equity has the potential to deliver superior long-term returns while debt seeks to provide stability to the portfolio. This diversification limits the portfolio from downside risks if either equity or debt enters a bearish phase.