The Pension Fund Regulatory and Development Authority (PFRDA) has changed the fee structure of services offered by the National Pension System (NPS), Atal Pension Yojana (APY), NPS-Light and Unified Pension Scheme (UPS). These new rules will be applicable from October 1 and will replace the old rules issued in June 2020. If you are associated with these schemes, then these changes are very important for you, because they can have a direct impact on your investment.

How much will be the new charge? Fee for government sector (NPS and UPS)

The fees for government sector subscribers have been kept quite simple. The fee for opening the PRAN will be Rs 18 for the e-Pran kit (default option) and Rs 40 for the physical Pran card. The annual maintenance fee (AMC) will cost Rs 100 on each account. The good thing is that the accounts which have zero balance will not be charged any fee. Also, the transaction fee will not cost at all (NIL). These changes can benefit investors more, especially if your balance is low.

Fee for Atal Pension Scheme and NPS-Lite

The fees for Atal Pension Yojana and NPS-Lite users are even more economical. Pran opening fee is Rs 15. The annual maintenance fee will also be Rs 15. Here also the transaction fee will be absolutely zero (NIL). This low fee is a matter of relief for those who are planning pension with small investment.

Fee for private sector (NPS and NPS Vatsalya)

The fee for subscribers of NPS and NPS Vatsalya in the private sector is slightly different. The fee for opening the Pran will be Rs 18 for the e-Pran kit and Rs 40 for the physical Pran card. The transaction fee will also be NIL here. Annual Maintenance Fee (AMC) will be decided on the basis of Tier I Corpus – no fee on NIL balance, Rs 100 from Rs 1 to 2,00,000, Rs 2,00,001 to Rs 10,00,000, Rs 150, Rs 10,00,001 to Rs 25,00,000, Rs 300, Rs 25,00,001 to Rs 50,00,000 and Rs 500 above Rs 50,00,000. These slab-based systems are designed keeping in mind big investors.

Main guidelines

These are the revised fees maximum limit, ie CRA cannot take more than this, but can charge less or negotiated fee (on agreement with employers, subscribers or pops). The AMC for the private sector is slab-based and is directly connected to Tier I Corpus. For UPS subscribers (government sector), these fees will be applicable only during the accumulation phase (duration of investment deposit), while separate fees for payout phase (duration of pension payment) will be fixed later. If Cra starts a new service, its fee will be charged at the actual price, but no additional profit will be made and it will have to get PFRDA approval. All the applicable fees will be mandatory to be shown clearly on the official website and mobile app of CRAS. If the fee in the new rules has already been reduced, it will be beneficial for investors as the higher part of their contribution amount will go into investment and net returns will be better. On the other hand, if the fee has increased, a slight cost will increase, which can have a slight impact on long term returns.