- Date : 30/09/2023
- Read: 3 mins
The NPS Tier II Default Scheme is a more flexible pension system option for government subscribers, and it’s bound to be flexible. Read on to know more!
Government sector subscribers within the NPS will now have an extra investment choice called the Default Scheme, in addition to the current investment options. The NPS Tier II Default Scheme has been created to provide flexibility and convenience that cater specifically to the needs of government sector subscribers.
In this article, we will aim to comprehend the update and its benefits.
1. Understanding the National Pension System update with NPS Tier II Default scheme.
2. Listing the benefits of the NPS Tier II Default Scheme and an NPS Tier II account.
3. Activating an NPS Tier II account using the online method.
Video Embed: https://www.youtube.com/watch?v=dab69vW2Y1c
What is the national pension system update?
The Pension Fund Regulatory and Development Authority (PFRDA) has implemented a default investment choice for Tier II accounts within the National Pension System (NPS). As of now, this particular alternative is exclusively accessible to government workers.
Until this point, the default scheme was exclusively accessible to individuals holding NPS Tier I accounts. However, subscribers are now granted access to a simplified NPS Tier II Default Scheme for government subscribers, which closely resembles the Tier I scheme, eliminating the necessity of actively selecting an investment or pension fund scheme.
NPS Tier II default scheme benefits
There are a number of benefits of NPS Tier II Account, which also reflect in the updated scheme.
Subscribers can withdraw funds from their NPS Tier II account whenever they wish, providing liquidity and flexibility for surplus funds.
They can transfer funds from Tier II to Tier I at any time without restrictions.
The Tier II account doesn't require a minimum balance, allowing unlimited investments.
Subscribers can nominate different individuals for their Tier I and Tier II accounts, with separate nomination options for each.
How to activate an NPS Tier II account?
To open an NPS Tier II account, you need to follow these steps:
Visit the electronic National Pension system (eNPS).
Scroll down to the "Quick links" section and select "Tier II Activation."
Provide the necessary details and click "Verify the Permanent Retirement Account Number" to receive an OTP on your registered mobile number.
Enter the OTP, furnish your bank details, and verify your Aadhaar.
Upon receiving your acknowledgement number, proceed to choose your investment option and pension fund manager.
Update nominee details, upload required documents, and make a payment of INR 1000 to successfully open your NPS Tier II account.
The PFRDA has recently unveiled the new initiative for government employees, allowing them to access the NPS Tier II default scheme option. This initiative aims to simplify investments in NPS Tier II by eliminating the need for employees to individually choose fund managers for their investments.