PRAN (Permanent Retirement Account Number)

What is PRAN in NPS and where is it used?

The PRAN (Permanent Retirement Account Number) refers to the unique ID that is allocated to every subscriber under the National Pension System (NPS). This is a 12-digit number which can be used by the subscribers to identify and communicate their enrollment information under the NPS.

So, the PRAN card is simply the identification card that will contain the basic details about the NPS account like: Name of the subscriber, father’s/mother’s/husband’s name, date of birth, retirement account number, signature etc. The subscriber can request for a physical card or download a digital copy, after the account has been activated. The card looks very similar to a PAN card.

The NPS and NPS Vatsalya are only available for individual subscribers and a joint account between family members is not allowed. Each subscriber can operate only 1 NPS account at any given time. But it is possible to have one account for the New Pension Scheme and a separate account for the Atal Pension Yojana (APY).

How is PRAN used in NPS?

The National Pension System provides the individuals an option to do systematic long-term savings for their retirement. When registering for NPS, the subscribers need to first open a retirement account. After that, during their working/employment years, the subscribers have to regularly contribute money to the retirement account.

At retirement time, this account can be closed and the amount that is accumulated over the years can be withdrawn in a lump sum payment (up to a certain limit) or it can be used to purchase a monthly pension plan from an Annuity Service Provider (ASP). So, the ‘Permanent Retirement Account Number’ that is allocated, will be the unique identification number of the retirement account.

The PRAN can then be used for all future communication and transactions. For example, the subscribers can add money to their account through their eNPS account (online mode), through a Point of Presence (POP) (offline mode), through their employer etc. (Refer: How to make contribution to NPS account?). Moreover, any transaction done in the offline mode by submitting forms to the POP or a POP Service Provider (POP-SP), will require the quotation of the PRAN number in the forms.

Employer contribution

Some employers offer to pay a part of the salary of the employee as NPS contribution. The employers refer to this as the ‘Corporate NPS scheme’ and they usually ask their employees to provide their NPS account details. So, in most cases, the subscriber would first need to open the account themselves and then give the details to the employer.

Once the employee shares the PRAN information, the employers can then directly deposit the money to the retirement account of the employee. This is usually done on a monthly basis, along with the salary payment. The maximum deposit amount will depend on the Basic Salary + DA of the employee.

Since the companies could have their own policies and procedures, the employee should directly check the details of the corporate NPS scheme offered by their employers. The tax exemptions available under the NPS will depend on the method in which the money was deposited to the account (refer: What is the tax benefit of NPS scheme?).

Tier 1 and Tier 2 account

At registration time, the subscriber can decide to open only a Tier 1 account or a Tier 1 + Tier 2 account. The Tier 1 account is the primary account which has to be mandatorily opened when subscribing to the NPS. Whereas, a Tier 2 account is optional, and it can be opened to save additional money. It is not possible to just open and operate a Tier 2 account. (Refer: How to open Tier 2 account in NPS?)

If the subscriber decides to open both the accounts, then these will be linked to the same retirement account. This means that there will only be a single PRAN generated for both Tier 1 and Tier 2 accounts.

The Pension Fund Managers (PFMs) run different Pension Schemes for Tier 1 and Tier 2. So, the subscribers can choose different scheme preferences, and different risk tolerance levels. But the main difference between these 2 accounts, is in the withdrawal restrictions and the tax benefits. For the complete details, refer: What are Tier 1 and Tier 2 NPS accounts?

How to get a PRAN card?

It should be clear by now that to get a new PRAN, the individual first needs to register in the National Pension System. But if the subscriber has lost his/her physical PRAN card, then a new one can be requested online from the eNPS account. A duplicate card can also be requested in offline mode, by submitting a request to the Point of Presence (POP) or the POP Service Provider (POP-SP).

There are primarily 2 ways to open a new retirement account:

  1. Online mode (Through eNPS website)
  2. Offline mode (Through a POP/POP-SP)

When opening the account online, the unique account number is generated immediately after the initial contribution has been paid by the subscriber. However, the PRAN is only activated after the successful verification of the KYC documents that were uploaded at registration time. (Refer: How to open NPS account?)

If the account is opened through an offline agent, then the PRAN will only be generated after the submitted documents have been processed by the POP. Usually, when the account is activated, an email and SMS notification is sent to the registered email ID and phone number of the subscriber.

Creating eNPS account

After the retirement account has been opened, the users can create an eNPS account by using their PRAN login and password. This account is very helpful in doing multiple online transactions like:

View transaction statements (refer: How to view and download NPS statements?)
Balance inquiry
Download ePRAN card copy
Making additional contribution
Change fund allocation (refer: How to set and change scheme preference in NPS?)
Checking scheme performance
Changing personal information (refer: How to update personal details in NPS account?)
Submitting Withdrawal request
etc.

Disclaimer

  • This page is for education purpose only
  • Some information could be outdated / inaccurate
  • Investors should always consult with certified advisors and experts before taking final decision
  • Some images and screenshots on this page might not be owned by FinLib
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