The Pension Fund Regulatory and Development Authority (PFRDA) has made the same-day settlement of payments towards the National Pension System (NPS) mandatory from July 1, 2024. This will make its processes more efficient while allowing customers to receive the details of the Net Asset Value (NAV) of their contributions and the allocated units on the same day.

Its July 26 circular states that the settlement time has been reduced from next day (T+1) to same day (T+0). The circular says, “With a robust system-level interface between the TB (Trustee Bank) and CRAs (Central Record-Keeping Agencies), contributions received by TB till 11 AM on any settlement day will now be considered the same day. This timeline will be effective from 1st July 2024. Contributions received by TB after 11 AM will be invested the next day (T+1)”.

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Options For NPS Contributions

NPS is an investment scheme for retirement and is open to all Indian citizens, whether resident or non-resident, government or private sector employees, or self-employed. The minimum annual contribution in an NPS Tier I account is Rs 500, and Rs 250 in Tier II. One can invest in NPS online or offline. Here are some ways to contribute to NPS:

1. One can invest in NPS via the physical mode. For this, the individual will require to register with a points of presence (PoP) and make the initial contribution in cash or a cheque.

2. In the online option, they will need to log in to the online NPS account with CRAs provided by the PoPs, or eNPS platform provided by the NPS Trust

3. Similarly, one can log in via the NPS mobile application

4. Alternatively, they can contribute through the employer.

The payment can be made via cash, cheque, UPI, UPI QR, and D-Remit. According to the circular, “NPS subscribers have multiple modes for contribution, including PoPs, eNPS, D-Remit, UPI, UPI QR Code and employers. These contributions are deposited into the designated account of the TB following the sharing of information with the CRAs.”

NPS Details And Unit Allocation

Currently, contributions received by the TB are invested on the next settlement day (T+1). After receiving it, the PoPs upload the details online or send the information to CRAs, and the fund is remitted to TB, which then transfers it to the pension fund as per the CRA’s instructions. Upon receiving the funds, the pension fund invests the amount and informs the subscriber about the

scheme’s NAV; after this, the CRAs allocate the units. At this stage, the corresponding units against the contribution are reflected in the subscribers’ account. It is also informed to the subscriber via an SMS or email.

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Same Day Or T+0 Settlement

While other investment modes follow the T+1 settlement process, barring the D-Remit (Direct Remittance) option, which offers the T+0 facility if completed by 9:30 am, NPS contributions will be settled on the same day if received by 11:00 am. The subscribers will also receive the NAV details on the same day.