Pension fund regulator PFRDA is scouting for a bank to act as National Pension System (NPS) trustee to facilitate fund transfers across entities such as annuity service providers and subscribers.
NPS has more than 87 lakh subscribers with Asset Under Management (AUM) of over Rs 80,800 crore. Axis Bank is the current Trustee Bank for NPS.
“The NPS Trustee Bank…shall be required to provide banking facilities as directed by NPS Trust under the prescribed regulations and guidelines,” said the Pension Fund Regulatory and Development Authority (PFRDA) while inviting bids from banks.NPS Trust, responsible for taking care of the funds under the NPS, holds accounts with the NPS Trustee Bank.
The Trustee Bank facilitate fund transfers across various entities of Central Recordkeeping Agencies (CRAs) system –nodal offices, aggregators, pension funds, annuity service providers and subscribers, among others.
Recently, the government has given mandate to the PFRDA to administer ‘Atal Pension Yojana-(APY)’ through Banks.
The limit on deduction on account of contribution by employee to NPS, which was capped at Rs 1 lakh last year, has been removed and now the tax deduction can be claimed up to 10 per cent of salary subject to ceiling of Rs 1.5 lakh.
An additional deduction for the investment up to Rs 50,000 in NPS has been introduced this fiscal. This is an exclusive tax deduction only for investment in NPS and not available for any other investment.