What is NPS Sanchay? How Is It Different From National Pension System? All You Need To Know

The Pension Fund Regulatory and Development Authority of India (PFRDA) has launched the NPS Sanchay Income Tax Guide. It is a simpler variant of the National Pension System and falls under the All Citizen Model and MSF Framework. NPS Sanchay would help in expanding PFRDA services to the informal sector, which account for almost 90% of the total workforce.

What is NPS Sanchay?

NPS Sanchay is a simplified variant of NPS. The default design of the scheme would help in reducing complexities with selection of investment options and determination of of asset allocation, while also addressing constraints arising from limited advisory support at the last-mile level.

NPS Sanchay Eligibility

Any Indian citizen falling in the age group of 18 to 85 years can apply for the NPS Sanchay scheme. They can apply through a point of presence (PoP). PoP- Service Provider or through the online platform that are eligible to open a pension account.

NPS Sanchay Exit Patterns

The NPS Sanchay investment pattern for the scheme must align with the extant investment guidelines applicable to government sector schemes. The investment pattern for NPS Sanchay will mirror rules that already guide government-sector NPS schemes. These rules also govern central and state government NPS accounts, the Unified Pension Scheme, Atal Pension Yojana, NPS Lite and specified corporate government-linked schemes. All pension funds registered with PFRDA are permitted to offer NPS Sanchay to eligible subscribers.

NPS Sanchay Retirement Planning And Exits

Subscribers can exit from NPS Sanchay scheme as per the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015, along with notified amendments. The PFRDA has not created a separate regime for NPS Sanchay exit.

The authority also clarified that the charge framework for NPS Sanchay will match existing common NPS schemes such as NPS All Citizen, NPS Vatsalya and NPS Lite. Any future fee revisions announced by PFRDA will automatically extend to NPS Sanchay. Minimum contribution rules and later deposits will likewise follow current NPS norms unless changed specifically.

Under the Multiple Scheme Framework, pension funds can run several schemes that share broader NPS conditions. However, PFRDA may prescribe different investment patterns for each scheme depending on policy goals. NPS Sanchay fits into this framework by keeping regulatory standards similar while tailoring default features towards informal sector participants and their lower familiarity with financial products.