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PFRDA relief to govt staff with frozen accounts

Cognizant of this scenario where the subscriber is unable to use either the previous or the new PRAN, PFRDA has taken steps to preserve pension accumulations

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The Pension Fund Regulatory and Development Authority (PFRDA) is easing the process of reactivating certain frozen Permanent Retirement Account Numbers (Pran) of government employees.

Many government staff, who had subscribed to National Pension System (NPS), leave or change their employment and discontinue NPS accounts, by even withdrawing the applicable lump sum amount. Subsequently, their accounts were deactivated. Under re-employment or re-installment, these government staff often ended up with a new Pran, but were unable to use them because they were duplicate of the first PRAN.

Cognizant of this scenario where the subscriber in unable to use either the previous Pran (deactivated) and the new Pran (duplicate), the PFRDA has taken steps to preserve the accumulations of pensions.

Altogether, there are over 50 lakh government sector subscribers of NPS, with 66% from state-governments. In total, there are over 1.41 crore subscribers under NPS and Atal Pension Yojana.

In a communique to central and state government ministries and departments, and autonomous bodies, the PFRDA said, "...all NPS subscribers are advised to continue in the system with the same Pran/first Pran till the subscriber attains the age of superannuation or 60 years of even if the subscriber has become jobless temporarily and withdrawn 20% from his/her Pran."

The regulator further clarified,"The 20% withdrawn amount will be considered as a special withdrawal and same Pran would be activated on the employees joining a new employer and making contribution to the NPS."

Like Universal Account Number (UAN) in case of provident fund, the Pran is unique and portable across locations and employment. This means the same Pran should continue through the working tenure of any employee, be it in government or non-government sector.

The PFRDA has directed staff to intimate previous Pran to the employer on joining new service. The Assets Under Management (AUM) per subscriber is maximum for central government sector (Rs 3.57 lakh), followed by state government (Rs 2.43 lakh) and corporate sector (Rs 2.4 lakh). There are 29 states under NPS. At the end of Dec-2016, Tamil Nadu notified but was yet to adopt NPS architecture. West Bengal and Tripura were also yet to notify NPS.

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