Kolkata: Come July and National Pension System or NPS subscribers will witness a tweaking of account-level charges. It follows the decision of the regulator PFRDA (Pension Fund Regulatory and Development Authority) to tighten annual maintenance costs especially for Tier-II and dormant accounts. The matter has been clarified by a circular issued by the PFRDA and it seeks to introduce a more uniform framework across account types. One of the immediate changes that NPS subscribers will face is the alignment of annual maintenance charges for Tier-II accounts with that levied on Tier I accounts within the same sector, government or private. Thus there will no longer be different rates between Tier I and Tier II. PFRDA has also kept a safeguard for accounts with low balance. The government is trying to popularise NPS to create a pan-India pension system.

Charges for dormant account

The regulator has said that dormant accounts will attract reduced but continuing charges. It has also said that an NPS account will be treated as dormant if the subscriber makes no contribution for four consecutive quarters. Once an NPS account becomes dormant, it will face a charge of 10% of the applicable rate and this fee will continue till the account is again activated.

Relief for some accounts

While PFRDA emphasised the fees on the dormant accounts, NPS-Lite accounts and those under Atal Pension Yojana will not face any fees/charges even if the balance is zero. This will ensure that subscriber with low income are not hauled up for their inability to contribute.

PRAN-related charges

The circular by PFRDA has also attempted to simplify charges associated with PRAN.
PRAN opening charge will apply only at the time of initial account creation
Opening or activating additional accounts (Tier I or Tier II) within an existing PRAN will not attract any charge
This removes duplication of fees and makes it easier for subscribers to expand their NPS usage without incurring incremental onboarding costs.

PRAN-related charges simplified

The circular also simplifies charges associated with PRAN or Permanent Retirement Account Number. It has said that PRAN opening charge will apply only when the account is created. If one opens/activates additional Tier I or Tier II accounts within an existing PRAN, it will not impose any new charge on the subscriber. Therefore, there will be no duplication of fees.