1. Cross Selling Dept., SBI

2. 2
1) Why NPS
2) Benefits from NPS
3) Flexible Compensation
4) How does NPS work
5) SBI – Brief on POP
6) On-boarding under Corporate Model
Content

3. Why NPS?

4. Do I have a plan for my Retirement……..
 In 20s: We think its too early
 In 30s: Setting up a family
 In 40s: Children education and housing takes the priority
 In 50s: There is a sense of urgency for retirement savings
 By 60: It’s too late
Can I Retire without a Pension

5. • Like most other developing countries, India does not have a universal social security
system to protect the elderly against economic deprivation
• As a first step towards instituting pension reforms, Government of India moved from a
defined benefit pension to a defined contribution based pension system for it employees,
which provides investors an option to avail of reasonable market based returns over a long
run
• The Government has introduced the National Pension Scheme (NPS), and made relevant
income tax amendments to make it favorable for corporate sector to offer NPS to their
employees.
• A citizen of India including NRI between 18 – 60 years of age at the time of submission of
NPS application and complied with the KYC (as detailed in the NPS application form) can
join NPS
• NPS is based on a unique Permanent Retirement Account Number (PRAN) which is allotted
to each subscriber by NSDL. Individual who joins NPS is called Subscriber of NPS
POST RETIREMENT PENSION IN INDIA

6. NPS & Superannuation Comparison
Parameters Superannuation NPS
Contribution 15% of Basic +DA 10% of Basic +DA
Tax Benefit
Part of Rs. 1.50 Lacs, excess contribution above
Rs. 1.5 lacs taxable as perquisite
Additional tax benefit u/s 80 CCD (2),
over and above Rs. 1.5 lacs under 80 CCE and
Rs. 50,000 u/s 80 CCD (1B)
Withdrawal on Exit Only 33% of corpus, which is tax free
Upto 60% of corpus, out of which 40% is tax
free
Expected Return Approx. 7.5% - 9%
Approx. 10.38% in five-year period (industry
average)
Transparency
No data related to holding and NAV, fee structure
not clear
Daily publishing of NAV and holding structure
Flexibility – Change
of Asset Manager
Cost implications in case of change of asset
manager which can range from 2.05% - 2.5%
Flexibility to change PFM once in FY and asset
allocation twice in FY
Management Fee
Not disclosed (generally varies from 0.25% to
1.5%)
0.01%, Lowest in the Financial Sector
Infrastructure Part of larger Business schemes Dedicated infrastructure to manage the funds
Customized Portfolio No customization possible at subscriber end
Subscribers can design their portfolio as per
their risk-taking ability
24X7 Access No access Complete access on NPS account
Portability of account Not possible
Complete flexibility for portability. From
Corporate to Corporate or Individual and vice-
versa

7. NPS Benefits

8. 5 MAJOR NPS BENEFITS SNAPSHOT
TAX BENEFIT
FLEXIBILITY OF INVESTMENTS
PENSION & WITHDRAWAL BENEFITS
LOW COST STRUCTURE
MARKET LINKED RETURNS

9. NPS TAX BENEFITS
Employee Contribution Tax Benefits
Employee Contribution:- u/s 80 C – Up to
150000/-
- PF Contribution
- Superannuation Contribution
- Life Insurance premium
- Mutual Fund subscription
- Etc……………………
+
- Employee contribution to NPS
_________________________________
= 150000/-
Voluntary Contribution: u/s 80 CCD(1B)
Deduction on investments up to Rs. 50,000
TAX BENEFIT:-
Employee Contribution:- u/s 80 C – Upto 10% of Basic Salary (with a ceiling of Rs.1.5 lacs)
Employee Contribution:- Deduction up to Rs. 50,000 u/s 80 CCD(1B)
Employer: U/Sec 80 CCD (2)- Upto 10% of Basic Salary (with no monetary ceiling)
All of these contributions have mutually exclusive tax saving benefits
Employer Contribution: u/s 80 CCD (2)-
Any contribution made by the employer to the extent of 10% of Basic Salary and DA is
deductible from Taxable income over and above the limit under Sec 80C. This benefit is
linked to Tier I Account only.

10. • Subscriber can select different PFM & Asset Allocation for his / her Tier I and Tier II A/Cs
• Subscriber gets the option to change PFM once in a FY & Asset Allocation Pattern twice in a
FY for both Tier I and Tier II accounts independently
FLEXIBILITY OF INVESTMENTS :-
1. Choice of Pension Fund Manager (PFM): 8 PFM shortlisted by PFRDA
2. Choice of Asset Allocation: Auto (Life Cycle Fund)/ Active Choice
Active Choice: Subscriber selects the percentage allocation of funds amongst 4
Asset Classes (i) E- Equity (max 50%), (ii) C-Corporate Bonds, (iii) G- G-Sec &
(iv) AIF-Alternative Investment Fund (max. 5%)
Auto Choice (Life Cycle Fund): 3 Pre-Defined portfolio as per varying risk profiles
(i) LC-25 or (ii) LC-50 or (iii) LC-75
NPS INVESTMENT BENEFITS
Age (in Years) Asset Class E Asset Class C Asset Class G
Upto 35 50% 30% 20%
36 48% 29% 23%
37 46% 28% 26%
- - - -
55 and Above 10% 10% 80%
LC 50 – Moderate Risk

11. NPS INVESTMENT BENEFITS
MARKET LINKED RETURNS :-
Superior NAV based returns
Source: NPS Trust
Industry Average Benchmark
Equity 14.25% 14.06%
Corporate Bond 8.97% 8.65%
G-Sec 7.92% 7.46%
Annualized returns over last 5years as on 30th Apr. 2018
Returns of PFMs

12. NPS COST STRUCTURE BENEFITS
LOW COST STRUCTURE:-
Lowest Fund Management Charge: 0.01%
(exclusive of GST)
Sl.
No
Inter
mediary
Particulars
Mode of
Payment
Tier I Tier II
1 CRA Transaction Charges
Unit
Redemption
NSDL - Rs. 3.75 Rs. 3.75
2 CRA
PRAN Issuance Charges
(one time)
NAV
Cancellation
/
Unit
Redemption
NSDL - Rs. 40.00 NA
3 CRA
Account Maintenance
Charges (Annually)
NSDL - Rs. 95.00 Nil
4 Custodian Custodial charges 0.0032% p.a.
5 PFM Investment Management Fee 0.01% p.a.
6 Trust Administration Fee 0.005% p.a

13. PENSION & WITHDRAWAL BENEFIT
40% OF THE ACCUMULATED CORPUS IS TAX FREE ON WITHDRAWAL
PENSION & WITHDRAWAL BENEFITS:-
Minimum 40% of pension wealth to be used to buy annuity from IRDA approved Annuity
service provider who will provide monthly pension to employee based on the size of
corpus at the time of retirement
FOUR OPTIONS FOR THE FUND ACCUMULATED
1. 60% WITHDRAWAL : 40% ANNUITY
• Maximum 60% of pension wealth is allowed for withdrawal with 40% Non
taxable and rest 20% taxable
• Minimum 40% of pension wealth is to be used to buy annuity from IRDA
approved Annuity service provider
2. 100% ANNUITY
• 100% of pension wealth to be used as annuity
3. 40% ANNUITY : 60% SCATTERED PAYMENT OVER 10 YEARS (taxable)
• Minimum 40% of pension wealth to be used to buy Annuity
• 60% of the pension wealth to be withdrawn over 10 years
4. 40% WITHDRAWAL : 60% ANNUITY
• Withdrawal is completely tax free

14. Flexible Compensation for Corporate
Subscribers

15. Head Particulars
With NPS
Employee
Contribution
Employer
Contribution
CTC Basic 5.00 5.00
HRA 2.50 2.50
Allowances 7.50 7.00
NPS Co-Contributions -- 0.50
Total Salary 15.00 15.00
NPS Deduction Employer Contribution (10% of Basic) -- 0.50
Employee Contribution u/s 80C -- 0.50
Employee Contribution u/s 80CCD (1B) -- 0.50
Total Contribution to NPS -- 1.50
Taxable Income after NPS Contribution 15.00 12.50
Employee contribution u/s 80C (PF/ ELSS/ ULIP/ etc.) -NPS 1.50 1.00
Total Taxable Income 13.50 12.50
Savings on Income Tax (@30%) 0.45 0.75
Restructuring of Salary CTC
Rs. In Lacs

16. How does NPS work

17. WITHDRAWAL SNAPSHOT
Retirement Age
Investment Period
18 35 40 45 50 55 60 70
40% minimum purchase of annuity
Balance 60% can be withdrawn
in phased manner or lumpsum
PREMATURE WITHDRAWAL:-
Tax free withdrawal, 25% of own
contribution (excludes employer
contribution) after lock-in period of 3 years
Contribution Allowed beyond age
of 60 Years upto 70 years
MATURITY WITHDRAWAL:-
Lump Sum:- 60% of total Corpus with 40% tax free
Annuity Pension :- 40% of the corpus will be
compulsorily used for Annuity purchase
Complete withdrawal, if corpus is below Rs 2.0/- lacs
Purposes for which partial withdrawal allowed
 For the purpose of higher education of his/her children,
 For marriage of his/her children,
 For purchase or construction of residential house or flat
 For treatment of specified illnesses.
65
Entry Eligibility 60 -65 Years

18. NPS Two Tier Structure
Particulars Tier I Tier II
Option of selection of A/C Mandatory - Pension A/C Optional – Investment A/C
Withdrawal Facility Conditional & Restricted
Withdrawal
Yes - Anytime
Minimum Contribution at
the time of A/c opening
Rs. 500 Rs. 1000
Minimum amount of
subsequent contribution
Rs. 500 Rs. 250
Minimum Contribution
Required per year
Rs. 1000 -
Minimum no. of
contribution per year
One -
Frequency of contribution
permitted
Unlimited Unlimited
Tax Benefit Available Yes No

19. SBI – A brief on POP

20. SBI - A Point of Presence (POP)
• The oldest POP into distribution of NPS since 2009
• POP with the largest distribution network (POP-SP)
• SBI accorded as ‘Default POP’ by PFRDA
• Awarded Best POP by PFRDA FY 15-16
• Best IT Infrastructure:
 Online Corporate Registration module
 Online Individual Registration module
 Standing Instruction (SI) facility

21. On-boarding under Corporate Model

22. On-boarding of new subscribers
Go to www.onlinesbi.com > Click on NPS > Corporate Employee Registration

23. On-boarding of new subscribers 4 options on Landing Page:
(i) Registration
(ii) Completing partially filled form
(iii) Download filled-up form
(iv) Tracking NPS Application status

24. On-boarding of new subscribers
(i) Registration – Enter your company’s CHO – 5509022 & CBO – 6509182
to proceed for registration

25. On-boarding of new subscribers
(i) Registration – Note TPRN for future reference & confirm if your
Company Name appears correct to proceed else fill correct CHO & CBO

26. On-boarding of new subscribers
(i) Registration – Fill all sections (preferably in Capital letters) to complete form-filling

27. On-boarding of new subscribers
(i) Registration – Complete ‘Personal Details’ section

28. On-boarding of new subscribers
(i) Registration – Complete ‘Personal Details’ section

29. On-boarding of new subscribers
After completing Personal details, is subscriber wants to complete form later or
session gets timed out, he/ she can complete the form filling by clicking on
‘Continue with partially filled’ and quoting earlier TPRN & DoB

30. On-boarding of new subscribers
Registration
(i) After submitting the form, a PDF is generated of which print needs
to be taken
(ii) Photograph needs to be affixed (no staple or signing across
photograph)and signature needs to be provided in applicable
sections
(iii) Application form submission must be along with self attested KYC
docs (Adhaar, PAN, Identity & Address proofs) and cancelled
cheque. In case more than one nomination is submitted, Annexure
III may also be attached with signature. Other Annexes may be
ignored.
(iv) In case employee has an account with SBI, cancelled cheque is not
mandatory but employee must indicate on a separate page that he
is an existing Bank customer, having fully operative account.
(v) Form needs to be submitted to HR team for verifying employment
details – Employee code, Joining Date and Retirement Date
(vi) HR team after verifying Employment details need to submit he
form to SBI for onward processing of forms

31. 31
THANK YOU

32. Asset allocations under Auto Choice
Age
Aggressive Life Cycle Fund (LC-75) Moderate Life Cycle Fund (LC-50)
Conservative Life Cycle Fund (LC-
25)
Asset Class (in %) Asset Class ( in %) Asset Class (in %)
E C G E C G E C G
Up to 35
years
75 10 15 50 30 20 25 45 30
36 years 71 11 18 48 29 23 24 43 33
37 years 67 12 21 46 28 26 23 41 36
38 years 63 13 24 44 27 29 22 39 39
39 years 59 14 27 42 26 32 21 37 42
40 years 55 15 30 40 25 35 20 35 45
41 years 51 16 33 38 24 38 19 33 48
42 years 47 17 36 36 23 41 18 31 51
43 years 43 18 39 34 22 44 17 29 54
44 years 39 19 42 32 21 47 16 27 57
45 years 35 20 45 30 20 50 15 25 60
46 years 32 20 48 28 19 53 14 23 63
47 years 29 20 51 26 18 56 13 21 66
48 years 26 20 54 24 17 59 12 19 69
49 years 23 20 57 22 16 62 11 17 72
50 years 20 20 60 20 15 65 10 15 75
51 years 19 18 63 18 14 68 9 13 78
52 years 18 16 66 16 13 71 8 11 81
53 years 17 14 69 14 12 74 7 9 84
54 years 16 12 72 12 11 77 6 7 87
55 years 15 10 75 10 10 80 5 5 90
BACK

33. RETURNS OF PENSION FUND MANAGERS as on 30th Apr. 2018
Source: NPS Trust
Annualized returns as on 30th Apr. 2018
TIME ASSET SBI LIC UTI ICICI REL KOTAK HDFC BIRLA
3 YRS
EQ 10.95 9.95 11.84 10.56 9.84 10.99 11.79 N.A.
CB 8.35 8.34 8.32 8.63 8.57 8.72 8.58 N.A.
GSEC 7.70 8.28 7.09 7.51 7.70 7.67 7.30 N.A.
5 YRS
EQ 14.05 N.A. 15.27 14.25 13.56 14.12 N.A. N.A.
CB 8.73 N.A. 8.80 9.24 9.09 8.98 N.A. N.A.
GSEC 7.95 N.A. 7.65 8.16 7.95 7.91 N.A. N.A.
BACK