Pension Fund Regulatory & Development Authority (PFRDA) has stipulated Rs 100-crore capital for any institution bidding for point(s) of presence (PoPs), which will be receiving contributions from the customers for their pension accumulation.
The PoP(s) are expected to commence their operations with effect from 1st April, 2009. POP shall be the first point of interaction between the voluntary subscriber and the new pension system (NPS) architecture.
PoP shall perform the functions relating to registration of subscribers, undertaking
Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to designated NPS intermediaries is required to fulfil following basic technical eligibility conditions to be registered as PoP under NPS.
These institutions, which will be applying for the PoPs, must have been regulated either by the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi) or the Insurance Regulatory and Development Authority(Irda).
The institutions should have a minimum of 25 branches, covering at least 25 districts spreading over three or more states with each branch conforming to IT Infrastructure and capacity to electronically link to the central record keeping agency (CRA).
Each of these branches should have demonstrated capability to electronically transmit in an efficient and secured manner. They must have a three-year track record of profitability (profit after tax) as of March 31, 2008. The institution should be in business of marketing/selling of retail financial services. However, Indian post can seek exemption from these conditions.
In the first phase of registration process, PFRDA will authorize designated branches of registered PoP(s) as service providers.
The Centre has introduced the NPS with effect from January 1, 2004. The new pension system covers, at present, new entrants to Central government services (excluding armed forces) and some state government services. PFRDA plans to make NPS available to all citizens of India with effect from April 1, 2009. The NPS is based on a unique individual permanent retirement account number (PRAN) created for individual subscribers.
In this system, a subscriber shall periodically contribute savings into his/her permanent retirement account (PRA) while he/she is working and shall use the accumulations at retirement to procure a pension for the rest of his/her life.
Subscribers in this system shall enjoy a variety of important facilities and rights including portability across jobs and locations, rights and choices regarding selection of pension fund(s) and schemes, freedom to switch between Pension Funds and service providers and nationwide access over a period of time.