PFRDA has introduced the NPS Tier II Default Scheme exclusively for Government Sector Subscribers


PFRDA vide circular dated 22nd September 2023 has introduced the NPS Tier II Default Scheme exclusively for Government Sector Subscribers. Government Sector Subscribers under NPS will be given additional investment option of Default Scheme along with the existing Scheme E / Scheme C / Scheme G investment options.

The key benefits of an NPS Tier II account:

  1. Greater Flexibility: There is no mandatory annual contribution requirement for Tier II. The Subscriber can open the account by paying the minimum contribution. There is no maximum limit on the amount that can be contributed under Tier II.
  2. Easy Withdrawals: With a Tier II account, subscribers can withdraw money at any point of time. It’s a convenient way to access the savings when subscribers may need them the most.
  3. Seamless Transfer: If subscriber wishes to move the funds to primary pension account (Tier I), it can be done at any point. This feature ensures that the investments remain dynamic and adaptable to your changing needs.
  4. No Minimum Balance: There is no requirement for maintaining a minimum balance in NPS Tier II account. It offers the freedom to contribute as much or as little as one wants.
  5. Separate Nomination Facility: The Subscribers can nominate beneficiaries for Tier II account separately, if required.
  6. Default Investment Scheme: The facility of the Default Investment Scheme of Tier I has been extended to Tier II accounts for Government Sector Subscribers. This facilitates the Subscribers to have access to a simplified default investment scheme, similar to Tier I, without the need for actively choosing a scheme of investment or PFs.
  7. Easy to onboard: To join Tier II and opt for the Default Scheme, the Subscribers need to provide consent or a request to the CRA through the associated nodal office. The online & electronic modes of consent mode available on the CRA portal for the benefit of Subscribers.

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