The Pension Fund Regulatory and Development Authority (PFRDA) circular dated September 29, 2022 said, “There are instances wherein the subscribers under the Corporate and Government sectors have not exercised Inter Sector Shifting (ISS) after leaving their employment on account of resignation or retirement. Those Subscribers are still associated with their erstwhile employers in NPS architecture even though they no longer work with them.”
According to the PFRDA circular, some NPS subscribers are reluctant to shift because the scheme or investment choice that was made available during their employment may not be available in the event that they switch to the All Citizen Sector. Changes to pension fund investment may be necessary as a result of such Inter Sector Shifting (ISS) at the moment.
To avoid this, “PFRDA has been determined that upon switching to the All Citizen sector, such subscribers under the Government/Corporate sector may continue with their current investment strategy and option to use Pension Funds (PF).”
According to the PFRDA circular dated September 29, 2022, “Hence, in the interest of those subscribers, it has been decided to permit such subscribers under the Government/ Corporate sector to continue with their existing investment pattern and Pension Fund (PF) choice as an option, on their shifting to All citizen sector. For such subscribers, their prospective and legacy contributions would continue to be invested as per the existing investment pattern/PF which was prevailing during their employment.”
Instead of continuing with the same investment pattern after the inter-sector moving, such subscribers will be free to choose any alternative investment pattern and PF as well.
Further PFRDA said, “Govt subscribers can not contribute to their NPS account post their superannuation until they choose to continue their account. It has been decided that such subscribers under Govt sector can continue to contribute to their NPS account seamlessly even after their superannuation without the need of submitting any request in this regard.”
CRA charges by the Subscriber
It should be noted that Annual Maintenance Charges (AMC) and Transaction Charges of CRA for subscribers following their resignation or retirement will be recovered from the appropriate PRANs from the quarter following their retirement or resignation.
Inter sector Shifting
PFRDA has urged employers to incorporate Inter Sector Shifting (ISS) into the leaving procedure by enabling staff to move their NPS accounts to a desired Point of Presence. In a circular dated March 11, 2021, the Pension Fund Regulatory and Development Authority said that, “”It has been observed that there are instances wherein the NPS Subscribers under Corporate Sector have not exercised Inter Sector Shifting (ISS) before leaving their employers due to various reasons viz Resignation, Retirement etc and those employees are still tagged with their erstwhile employers in Central Record Keeping Agency (CRA) system even though they no longer work with those employers.”