Recently the pension sector regulator revised distribution charges for the National Pension System. The new charge structure gives slightly more to the Points of Presence (PoPs)—which include NPS distributors like banks—to sell NPS and also incentivises them to get customers to invest in NPS every year. In fact, even the pension fund management charge that you pay the fund managers is likely to go up once the pension fund managers (PFMs) get fresh licenses. While these two charges are commonly known, there are charges under three other cost heads that you pay in NPS. These are costs that you pay to the central record keeping agency (CRA), custodian and the NPS trust.
It is not only the costs that you need to understand but also the manner in which they are levied is important to know. Read on to familiarise yourself with the charges in NPS and also to understand its impact on your investment.
