Many subscribers under Corporate Sector have not exercised Inter Sector Shifting before leaving their employers and those employees are still tagged with their erstwhile employers.
For all those who are contributing towards NPS under the Corporate Sector model and have left working with their employers, there is an important piece of procedural work that needs to be done. If you have retired or resigned from your job, you may still be tagged with your erstwhile employer in the Central Record Keeping Agency (CRA) System even though you may no longer be working with those employers.
PFRDA in a recent circular has stated that it has observed that there are instances wherein the Subscribers under Corporate Sector have not exercised Inter Sector Shifting (ISS) before leaving their employers and those employees are still tagged with their erstwhile employers in the Central Record Keeping Agency (CRA) System even though they no longer work with those employers.
In order to avoid such instances, the Corporate may complete ISS as part of the exit formalities by suitably advising the employees to transfer their NPS Account to Point of Presence (POP) of their choice.
Alternatively, the respective employers are required to furnish the list of those employees and their Permanent Retirement Account Numbers (PRANs) to CRA/ POP for flagging with an intent to de-tag those PRANs from the employer as per the guidelines below:
a) Corporate employees ( Corporate attached through a POP)
(i) Post flagging PRANs of such employees in the CRA system, the choice of POP needs to be exercised by the Subscriber within three months and if not, the PRANs shall be tagged to the respective POP of the Corporate employer under the voluntary sector.
(ii) Corporates that are acting as POPs and also offer NPS to their own employees (predominantly banks) are covered under this category.
b) Employees of Direct Corporate (no associated POP)
(i) Post flagging PRANs of such employees in the CRA system, choice of POPs needs to be exercised by the Subscriber within three months and if not, the PRANSs shall be tagged to eNPS under voluntary sector.
(ii) The Subscriber can continue under eNPS or migrate to any other POP of their choice.
c) Employees under Corporate CG pattern of investment
The employees whose PRANs are under a Corporate central government (CG) pattern of investment but have been flagged in the CRA system, need to exercise their choice of investment applicable as per their existing status, along with a choice of POP.
Intermediary Charges: Post flagging of the PRANs in CRA system, intermediary charges are to be borne by the Subscriber if the same were paid by the respective employer earlier.
What is POP
POPs offer the types of assistance under NPS through their organization of branches called POP Service Providers (POP-SP). From supporting enrollment to change of investment scheme to the issuance of printed account statement, POPs helps in discharging all NPS related activities. Practically every one of the financial institutions including banks, insurance agencies have selected themselves as POPs.
A subscriber is provided with the option of changing his/her POP/POP-SP. A subscriber under the Corporate model however cannot change his/her associated POP/POP-SP on his own until he/she changes employment or moves out of the sector. The Subscriber, however, cannot opt for different POP-SPs for his/her Tier I and Tier II account respectively.
Procedure to change POP
In the case of the Corporate Sector subscriber, if the subscriber changes job and joins an organisation not registered under NPS, the subscriber can continue the PRAN under the All Citizen of India sector. The subscriber needs to submit an Inter Sector Shifting (ISS-1) Form to the POP-SP with whom he or she wants to be associated in NPS. If the subscriber changes job and joins an organisation registered under NPS, the subscriber can continue the PRAN under the new Corporate by submitting the CS-S3 form.