How to Unfreeze NPS Account?

What are the Contours of NPS in India?

The National Pension System (NPS) is a best retirement plan in which one of GOI’s most exemplary social security initiatives to provide financial stability to the retired.  Opening the default Tier 1 account seals your NPS membership. 

However, it is prudent to open the optional Tier 2 account to supplement your growing corpus in the primary account. NPS rules are framed by the PFRDA (Pension Fund Regulatory and Development Authority) and administered by the CRA (Central Recordkeeping Agency) like NSDL or Karvy. 

The CRA provides you with a welcome kit along with the unique Permanent Retirement Account Number (PRAN) to access their e-governance portal for your operational needs.

Why Does Your NPS Account Get Frozen? 

There are ample reasons to disallow NPS account operations, jeopardizing your vital social security cover. You can initiate steps to unfreeze NPS account only after you have identified the underlying cause. 

Suffice to say, most of the reasons are traced to the violation of PFRDA guidelines and not complying with the CRA stipulations. Let us check the significant causes for a frozen NPS account.

• Minimum Contribution: You open the default Tier 1 account with Rs 500 and you must deposit Rs 1000 at least once every year to keep the account active. While there is no such rigidity for the Tier 2 account, the frozen Tier 1 account makes it inactive by default. Failure to comply with the stated minimum contribution is the primary reason for NPS account freeze. However, the CRA intimates you about such action through registered communication channels like email.

• Submission of Membership Form: You can subscribe to the NPS online, but you still need to send the Physical Form to your POP-SP (Point of Presence Service Provider) or the CRA, as the case may be. Your account is frozen for non-submission.

• KYC Compliance: Your NPS account is bound to be frozen for not complying with the KYC norms. Even if you have submitted the KYC documents, pending approval leads to an account freeze.

Indicators of Frozen NPS Account

The first sign of your frozen NPS account is the displayed error message while you are transacting online.  Though you are officially notified well in advance, you must have missed it, or the communication failed delivery.

In any case, the error message explicitly states that you are not eligible to continue with your subscriptions henceforth.

Now that you know the reasons for freezing your account let us explore the ways to unfreeze NPS account.  The solution is dependent on the reason for freezing. However, you can choose to resolve it offline or online as per convenience.

How to Unfreeze NPS Account Offline?

The offline method to unfreeze NPS account is undertaken at the POS-SP, most suitably where you obtained your membership. Alternatively, you may also locate the POP-SP in your vicinity to process your unfreeze request. Let us check the various solutions.

1. Minimum Contribution:

   You are already conversant with the minimum contribution requirement in the NPS Tier 1 account. You must compulsorily deposit a minimum of Rs.1000 (the earlier amount was Rs.6000) in a financial year at least once. Then, fill out the PFRDA specified unfreeze request Form UOS-S10 and submit it to the POP-SP, the NPS customer interface.  The critical points to remember are:

   • Attach a copy of your PRAN card with the form.

   • Deposit the minimum contribution of Rs. 1000 along with a penalty of Rs.100 per year of freeze. 

   • Unfreezing each of the accounts is subject to a penalty payment. 

   • You can deposit your contribution by cash, cheque, a DD using the NPS Contribution Instruction Slip (NCIS). 

   • The POP-SP credits the amount into your account and uploads the outcome into the CRA system.

   • The CRA is responsible for the “freeze” and “unfreeze” actions in your NPS account. 

   • Your account is activated upon approval. An intimation to that effect is transmitted to your registered email.

2. Submission of Membership Form:

   When non-submission of the NPS Form is the reason for your inactive account, the only solution is to comply with it. Even if you have joined the NPS through the POP or other intermediaries, the physical form must reach the CRA for account activation.

   Submit the filled-in, duly signed form to your NPS account opening POP or the CRA to activate your account. The unfreeze effect takes a few days from your form submission date.

3. Pending KYC Compliance:

   It is mandatory to submit the prescribed KYC documents while subscribing to the NPS. Although at times though, you have complied with the KYC norms, verification is inordinately delayed at the POP-SP.

   The outcome is that your account status remains inactive. Therefore, you must follow up with the POP-SP to expedite the process to unfreeze NPS account.

4. Deficient KYC Documents: 

   KYC documentation while enrolling for NPS membership is left unverified for an identified deficiency. The reason may be missing or invalid documents. In such a scenario, you must find the deficiency and arrange to furnish the relevant document to enable the POP-SP to verify and unfreeze NPS account.

5. KYC Rejection:

   At times your KYC documents are rejected by the intermediary bank for various valid reasons. The outcome is your frozen NPS account. 

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How do you unfreeze the NPS account then?

• Sign and affix a photograph on your NPS registration form hard copy.

• Approach the POP-SP with the KYC documents with a verification request.

• Since your NPS account is frozen, you must ensure that the registration form is authorized, signed, and stamped appropriately by the POP official mentioning the employee ID.

•  The POP updates the details in the CRA system, upon which your NPS account is unfrozen. 

• Notification to your registered email confirms your NPS account activation.

• Now you are ready to operate your NPS account and start contributing.

How to Unfreeze NPS Account Online?

Online operations are the preferred mode of the millennial generation. The digital platform provides a flexible ecosystem for getting your work done seamlessly. Unfreezing your NPS account is one of them.

All you need is to follow the below mentioned sequential steps to unfreeze NPS account, especially for complying with the minimum monetary contribution:

• Visit the eNPS portal and use your registered credentials to log in to your NPS account.

• Then, click on the ‘Contribution Option.’

• Next, enter your PRAN details, Date of Birth, and NPS subscriber Type.

• Make the mandatory minimum Rs 500 financial contribution on the following page.

• An OTP-based authentication and “Captcha” allow you to submit. 

• The CRA confirms your payment and notifies you accordingly at your registered email. 

• The implication is that your account has been successfully unfrozen, and you are free to continue with contributions henceforth.

In Conclusion

Your NPS subscription fulfills your long-term objective to secure your retired life financially. The NPS architecture ensures reasonable returns on the investment in market instruments aligned to your risk preferences.

While the PFRDA regulations are explicit, various deficiencies can freeze your account, impacting your corpus health. It is thus in your interest to identify the reason for freezing and explore how to unfreeze NPS account solutions quickly.

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