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| No Tier-II account for poor NPS subscribers |
| Vrishti Beniwal / New Delhi Nov 10, 2009, 00:33 IST |
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Subscribers of the low-cost version of the New Pension Scheme (NPS), called CRA Lite, will not be allowed to open a second savings account unlike normal subscribers. The tier-II account, to be operational from December 1, will facilitate withdrawals but require a minimum balance of Rs 2,000.
“CRA Lite subscribers will not get another tier-II account at the moment because they do not have the capacity to save that much,” said an official of the Pension Fund Regulatory Development Authority (PFRDA).
CRA Lite customers will enroll for the scheme through self-help groups (SHGs) and pay less than one-fourth of the charges paid by a regular NPS subscriber. The SHG will open a main account under NPS. There will be sub-accounts for people from low-income group under this account. They will have to pay Rs 30 for the permanent retirement account number (PRAN) card, against Rs 50 paid by other customers.
The pension regulator is negotiating the annual maintenance charges for this account with central record-keeper NSDL. While the regulator wants the charge at Rs 60 a year, NSDL has quoted Rs 75. The annual maintenance charge for a regular account is Rs 350 a year, which will be paid by the SHG in this case.
The charge of Rs 10 per transaction has also been waived for the low-cost account customers.
CRA Lite customers will get a statement of account once a year. The online facility, however, will only be available to the SHG. Madhya Pradesh will be the first state to open such low-frills accounts for its employees. It is expected to make the announcement this month.
“We are also looking at self-help groups, microfinance institutions and co-contributory schemes of state governments. Taxi unions and street hawkers associations are also asking for it.
It will give us volumes,” the official said, adding it would target navratnas and other public sector units for regular accounts.
Nalco will open NPS accounts for its 1,800 employees, who would contribute 6 per cent of their basic pay to the scheme. PFRDA is also talking to other navratnas and the Indian Banks’ Association (IBA) for similar initiatives. IBA is exploring the possibility of bringing all new bank employees under the scheme.
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