The NPS comprises of different types of intermediaries which take up different functions. This helps to reduce the overall risk for each task and better define each intermediary’s roles in the overall structure.
NPS Trust: The trust is entrusted with safeguarding the subscribers’ overall interests. It was constituted for taking care of all the assets and funds that are covered under the scheme. As per regulations, individual subscribers are beneficiaries of the NPS Trust. The funds are managed by a Board of Trustees. The board also ensures that the objectives of the trust are fulfilled. The trust supervises the Pension Fund Managers (PFMs) and interacts with other intermediaries such as Trustee Bank (Axis Bank), Central Recordkeeping Agency (CRA), National Security Depository Limited (NSDL), Stock Holding Corporation of India (SHCI), etc. The trust is entitled to enter into agreements with intermediaries and operating agencies to discharge its obligations.
Central Recordkeeping Agency (CRA): This body takes care of the record, administration and customer service functions. Other functions of the CRA include issuing of Permanent Retirement Account Number (PRAN) and internet and telephone PIN (IPIN/TPIN), maintaining the database of issued PRANs, scanning copies of KYC documents and recording all transactions.
Point of Presence (POP): They serve collection and distribution offices and are the first points of interaction for the subscriber with the scheme. POPs provide the services under NPS through a large network of branches which are also called POP-SP (POP Service Providers).
- Pension Fund Managers (PFM): These are financial institutions that manage the investments and are the ones responsible for different rates of returns the subscriber can hope to earn. All the funds under the NPS are managed by seven institutions appointed by the PFRDA. These PFMs are LIC Pension Plan, SBI Pension Plan, UTI Retirement Solutions, ICICI Prudential Pension, HDFC Pension Management, Kotak Mahindra Pension, and Reliance Capital Pension.
Custodians: Stock Holding Corporation of India (SHCIL) has been appointed by the PFRDA as ‘The Custodian and Depository Participant’ for NPS Trust. The custodian takes care of the assets purchased by the Fund Managers and Trustee Bank to manage the banking operations. The custodian is appointed by the authority to provide tutelary services for the pension schemes. SHCIL will ensure that the benefits due on holdings are received by the subscribers. They also perform the function of providing reports and detailed information to the NPS Trust as well as maintaining the confidentiality of the transactions. Under the NPS Scheme, custodians are responsible for any type of damage or loss to the assets related to the funds because of negligence on its part or from the approved agents. Custodians are not allowed to assign, transfer, hypothecate, pledge, lend, use or dispose off any asset related to the fund.
- Annuity Service Providers (ASP): These are the entities that provide the regular annuity pension after maturity of the scheme. An ASP is an Insurance Regulatory and Development Authority of India (IRDA) registered company designated by PFRDA to offer annuity services to subscribers. Currently, there are seven ASPs which provide annuity services to NPS subscribers. These are LIC, SBI Life Insurance Co. Ltd., ICICI Prudential Life Insurance Co. Ltd., HDFC Standard Life Insurance Co. Ltd., Bajaj Allianz Life Insurance Co. Ltd., Reliance Life Insurance Co. Ltd., and Star Union Dai-Chi Life Insurance Co. Ltd.