National Pension System (NPS)

National Pension System (NPS) is a voluntary defined contribution pension scheme introduced by Government of India. NPS is a low cost, tax efficient, flexible and portable retirement savings account regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA).

Objective of NPS:

  • To provide retirement income
  • Additional tax saving opportunity
  • Reasonable market-based returns over long term


All full-time employees in the age group of 18 to 60 years can opt for NPS . Contributions can be made upto 60 years of age.

Pre-requisites to participate in NPS

  • Employee is required to obtain a valid Permanent Retirement Account Number (PRAN) through VMware appointed Point of Presence (PoP) which is HDFC Bank
  • Employee needs to declare the amount of contribution towards NPS via EY payroll portal during annual FBP window

Note: Enrollment into NPS is open twice in a Tax Year (i.e. April and September). Communication on the enrollment process and timeline would be intimated to all employees via email before enrollment window opens.

Tax Benefits

Type of Contribution Maximum Exemption IT Section*
Contribution made by employee through employer 10% of Basic salary 80 CCD (2)

Types of Accounts:

Under NPS, Employee gets the option to open two accounts. A Tier-I account is mandatory  in order to join NPS and Tier 2 is optional. Difference between Tier I and Tier II accounts are as below:

Types of Accounts

Tier I NPS Account Tier II NPS Account
It is known as Pension account It is known as investment account
All investments for tax savings happen in this account only No Tax benefit on Tier II account
Withdrawal from this account restricted Withdrawal from this account can be done at any point of time as per Employee’s need
Minimum annual contribution required for this account is Rs.1,000 No minimum annual contribution required for this account

Investment options

NPS offers you two approaches to invest into your account:

  1. Active choice
  2. Auto choice

In Active choice, employee has the option to select the allocation percentage in assets classes, however in Auto choice, funds are automatically allocated into asset classes in a pre-defined matrix based on the age of employee. Along with the choice of investment, you also have the freedom of choosing Pension fund manager based on your convenience. Please refer the details of Pension Fund Manager on


  • NPS implemented by future Employer
    • Existing NPS Tier 1 & Tier II account can be transferred
    • Submit employment change request form along with the KYC documents and authorization from HR to POP
    • Prescribed charges need to be paid by employee
  • NPS not implemented by future Employer
    • NPS a/c would be transferred from Corporate NPS to Individual NPS a/c
    • You can continue to contribute as an individual under Tier 1
    • Prescribed charges need to be borne by individual

Conditions for withdrawal

  • Before 60 Years: You can withdraw only 20% (tax free) of accumulated fund; the rest 80% has to be used for purchasing annuity from designated life insurer providers
  • Between 60 – 70 years:  You can withdraw upto 60% of the accumulated corpus of which 40%  is tax free; at least 40% has to be used for buying annuity/pension from designated life insurance providers. Note: At the age of 60 years, withdrawal upto 100% is allowed subject to total corpus lower than INR 200,000
  • After Bereavement: In case of death of the subscriber, the nominee can withdraw in lump sum 100% of accumulated amount.

Contact Us

Phone: 022 3395 8471
Contact HR Source [VMware network access required]
ASK HR [VMware network access required]
Phone: (+91) 8067642555


National Pension System Employee Registration
National Pension System FAQ
NPS Awareness Deck

Last Updated: 2 Mar 2022, 1:08 PM