The Pension Fund Regulatory and Development Authority (PFRDA) has revised the fee structure for Point of Presence (POP) centers, which facilitate the opening and operation of National Pension Scheme (NPS) accounts.
This change aims to standardize the charges imposed on NPS members, replacing the previous model where POPs had the liberty to negotiate fees.
POPs, including banks, non-banking financial companies (NBFCs), and other financial entities, play a crucial role as intermediaries between customers and the NPS, providing essential services for a fee.
Key Points of the New Fee Structure:
- Registration Fee: A fee of Rs 200 to Rs 400 is now set for initial NPS registration.
- Contribution Fee: Charges on the initial contribution are capped at 0.50%, with a minimum of Rs 30 and a maximum of Rs 25,000.
- Non-Financial Transactions: A fixed fee of Rs 30 will be charged for non-financial transactions.
Background on NPS:
The National Pension Scheme is a government initiative launched in 2004 for its employees and extended to all citizens in 2009.
It’s a voluntary, long-term investment plan aimed at ensuring financial security post-retirement. Upon reaching the age of 60, members can withdraw a portion of the corpus and receive a pension from the remainder.
This reform in fee structure is part of PFRDA’s efforts to make NPS more user-friendly and transparent, ensuring that fees are reasonable and within specified limits.