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FAQs on NPS and Job Changes: Seamless Transfer and Continued Benefits
FAQs on NPS and Job Changes: Seamless Transfer and Continued Benefits
Navigating a change in jobs can be challenging, but it doesn't have to disrupt your National Pension Scheme (NPS) account. Here are some frequently asked questions and answers to help you understand what happens to your NPS account when you switch jobs.
What Happens to My NPS Account if I Change Jobs?
Your NPS account remains the same if you change jobs. You don’t need to re-open an NPS account again. NPS operates in a very portable nature, allowing seamless portability across job sectors and locations. This means you can easily shift your PRAN (Personal Retirement Account Number) from one sector to another—such as from the Central Government to the Corporate sector, or from a State Government to the Central Government—and vice versa. After exercising the portability option, you can continue with the same scheme and fund manager, or change as per your preference. You can also opt for a different Primary Occupational Pension (POP) available in your new location.
Managing Your NPS During Job Transition
Your NPS account will stay managed as if you have not relocated. You can continue making your investments online. Additionally, you will continue receiving emails related to your NPS account. However, if there is a change in your email address, you should notify the bank or NPS Manager to update your contact details.
Individual Contributions and Employer Contributions
Another key point to understand is the difference between individual contributions and employer contributions. If you are contributing to NPS individually, this contribution is tax deductible under section 80CCD1B. You can continue to do so personally, irrespective of any changes in your job. In contrast, if your employer is adding to your NPS under section 80CCD2, these contributions will cease once you leave the company. You will only be able to contribute via this channel if your future employer offers NPS.
Important Considerations
NPS is not EPS (Employee Provident Fund) where there is a need for worry while changing jobs. NPS remains with the individual, and you can provide the same NPS to your new employer. Even if you quit your job to start your own business, you can continue making personal contributions to NPS.
Conclusion
Moving from one job to another is a common part of professional life. With the flexibility and portability of the NPS, you can ensure that your retirement planning remains on track, regardless of job changes. By familiarizing yourself with these key points, you can better manage your NPS account during and after job transitions.