India's pensions regulator in India has allowed members of the Employees' Provident Fund (EPF) option to move their retirement savings to the National Pension System (NPS) giving effect to a proposal mooted by the government two years ago in the Union Budget for 2015-16, an offcial statement said on Tuesday.
"With the NPS gaining momentum vis-a-vis other retirement products and a number of queries being raised on the transfer of amounts from recognised Provident/Superannuation Funds to NPS, Pension Fund Regulatory and Development Authority (PFRDA) has clarified the process through a circular dated March 6, 2017," a Finance Ministry statement here said.
As the rules, a member looking to transfer funds from EPF to NPS must have an active NPS Tier-I account, which can be opened either through the employer where NPS is implemented or online through eNPS on the NPS Trust website.
"Further, the transferred recognised Provident Fund/Superannuation Fund will not be treated as contribution of the current year by employee/employer and accordingly the subscriber would not make Income Tax claim of contribution for this transferred amount," the statement said.
How to go about it
The subscriber must approach the concerned PF office where their account is, through her or his employer and request to transfer their savings to an NPS account.
"The recognised Provident Fund/Superannuation Fund Trust may initiate transfer of the Fund as per the provisions of the Trust Deed read with the provisions of the Income Tax Act, 1961," it added.
The present employer ie the nodal office while uploading the fund has to mention the transfer from PF/superannuation fund in the remarks column while uploading. The upload has to be made as per request letter of the ex-employer. In case of private sector employees, including subscribers covered under All Citizen’s Model NPS, the employees should request the recognised PF/superannuation fund to issue a letter to the present employer/PoP as the case may be mentioning that amount is being transferred from the PF/Superannuation fund to be credit in the NPS account of the employee/individual Tier-I account.