Corporate National Pension Scheme

The Corporate National Pension Scheme (CNPS) in India is a voluntary retirement savings scheme for employees of the corporate sector. It is a defined contribution scheme, meaning that both the employer and employee contribute a certain amount of money towards the employee's retirement savings.

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What is the Corporate National Pension Scheme?

The Corporate NPS allows employees to contribute a part of their salary towards their retirement plans. Employers can also make a matching contribution to the employee's retirement savings.

Contributions from both the employee and the employer are invested in a portfolio of stocks, bonds, and other securities. The goal of investing in this portfolio is to generate returns that will help the employee build a retirement corpus.

Employees who are self-employed or working in unorganized sectors can also participate in the scheme.

The Pension Fund Regulatory and Development Authority (PFRDA) regulates the CNPS. The scheme was launched in 2011 and is open to all employees in the corporate sector.

Features of Corporate NPS for Employees

Listed below are some key features of the scheme:

  • NPS is prudentially regulated by PFRDA with transparent investment norms and regular monitoring of fund managers by NPS Trust.

  • NPS accounts are portable across geographies and employment.

  • There is flexibility in choosing Point Of Presence, Pension Fund Managers, Investment Options, Annuity Service Provider, and Annuity schemes.

  • NPS is a low-cost pension scheme compared to others globally.

  • NPS transactions are simple and web-enabled, with all transactions traceable through the CRA system, and fund, NAV, and contribution status can be checked through the CRA website.

Who Can Join Corporate NPS?

An individual is eligible if he/she falls into the following categories:

  • All Indian citizens are eligible for NPS under Corporate model

  • Age range for NPS is 18 to 65 years

  • Open to all employees of registered organizations under corporate model

Types of Accounts under CNPS 

Two types of accounts are available to the employees under this model:

  • Tier I account is a retirement savings account where contributions are made by the subscriber, employer, or both. It is non-withdrawable and offers tax benefits for both parties.

  • Tier II account is a savings account that is voluntary, and subscribers can withdraw their savings whenever they want, provided they meet the minimum contribution and balance requirements.

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Contributions to Tier I and Tier II Accounts

Minimum Contributions (For Tier-I)

  • Minimum number of contributions per year = 1

  • Minimum amount per contribution = Rs 500

  • Minimum contribution per year = Rs 6,000

Minimum Contributions (For Tier-II)

  • Minimum amount per contribution = Rs 250

  • Minimum balance of Rs. 2000/- at the end of each financial year.

  • Minimum number of contributions per year = 1

How to Register for Corporate NPS?

Step 1: To register with the PFRDA, corporations must complete the necessary registration forms and provide the specified corporate KYC documents. Once this is done, a distinct registration number is assigned to each separate legal entity within the corporation.

Step 2: Employees can enroll in NPS, clarify their doubts, and complete the joining process digitally either during or after attending the awareness sessions. Once the employees have registered, the HR department validates their employment information and assists in activating their PRANs.

Step 3: The process of corporate contribution involves obtaining consent from employees and verifying it, after which the corporate deducts the contribution amount from the salary. The corporate may choose to send this amount to respective insurer for further processing.

Benefits to the Employer in this Model

Different benefits offered by the scheme to the employer are:

  • Companies registered with NPS can get tax benefits for contributing to their employees' pensions

  • Starting from April 1, 2012, up to 10% of the employer's contribution towards the pension can be deducted as a "Business Expense"

  • Corporates save on expenses related to trust formation, fund management, and recordkeeping

  • Companies can choose to either select PF for their employees or let them choose for themselves

  • NPS provides a platform for co-contributing towards employees' pensions

Wrapping It Up! 

Corporate Pension Schemes are an important benefit for an employer to its employees. These schemes provide a sense of financial security and stability for employees during their retirement years, which can ultimately improve their overall well-being.


  • What is the difference between NPS and corporate NPS?

    Basis of Comparison National Pension Scheme (NPS) Corporate National Pension Scheme (CNPS)
    Applicability Available to all citizens of India, including employees from the private, public, and unorganized sectors Only available to employees of specific corporations or organizations that have opted for the CNPS
    Sponsorship Sponsored by the Government of India Sponsored by the corporate or organization offering the CNPS
    Management Regulated by the Pension Fund Regulatory and Development Authority (PFRDA) Managed by a trustee appointed by the sponsoring corporation or organization
    Contribution Individual and employer contributions are mandatory and determined by the subscriber Contributions are determined and paid by the sponsoring corporation or organization
    Investment Choice Subscribers have the freedom to choose from different asset classes and fund managers Investment options are predetermined by the sponsoring corporation or organization
    Tax Benefits Contributions made by the subscriber and the employer are eligible for tax deductions under Section 80C of the Income Tax Act Contributions made by the employer are eligible for tax deductions under Section 80CCD(2) of the Income Tax Act
    Withdrawals Partial withdrawals are allowed after the completion of three years of subscription Withdrawals are subject to the terms and conditions of the CNPS trust deed
    Annuity Subscribers are required to use at least 40% of the accumulated corpus to purchase an annuity from a PFRDA-approved insurer Annuity purchase is subject to the terms and conditions of the CNPS trust deed
  • Can corporate NPS be withdrawn anytime?

    A subscriber can opt for complete withdrawal only if their total accumulated corpus is equal to or less than Rs. 2.5 lakh. However, it is important to note that exiting the NPS before five years is not permitted.
  • What is the minimum investment in corporate NPS?

    An initial contribution minimum of Rs. 500 for Tier I and a minimum of Rs. 1000 for Tier II is required at the time of registration.
  • How are the funds in a Corporate National Pension Scheme managed?

    The funds in a Corporate National Pension Scheme are managed by professional fund managers appointed by the Pension Fund Regulatory and Development Authority (PFRDA).
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