What is a PRAN Number and Why Do You Need One?

PRAN Number

Many people who have heard of or invested in the National Pension Scheme (NPS) in India have heard this term but may not know its meaning.

The Permanent Retirement Account Number (PRAN) is a unique 12-digit identifying number provided to all individuals who enroll in the NPS scheme. PRAN number is important in planning the retirement process since it helps the government manage and track all the pension accounts that fall under the NPS framework.

The primary purpose of PRAN is to efficiently identify all NPS subscribers and help them manage their retirement savings. It also ensures that all transactions and account activities are properly accounted for and can be easily tracked.

In this article, let us look at the benefits of a PRAN number and why you need one in your retirement plan.

What is a PRAN card?

We all have heard about PAN or Permanent Account Number and most of us are likely to have this especially if we are taxpayers. 

Individuals who enroll under the NPS scheme are given a PRAN number. An NPS PRAN card is physical proof of this number and is necessary for managing retirement accounts under the NPS framework. 

Under a PRAN number, two categories of NPS accounts are held. They are

• Tier-I account: A mandatory, non-withdrawable account meant for long-term retirement savings.
• Tier-II account: A voluntary savings account with withdrawal flexibility but without tax benefits. This means your tier-II account functions like a normal savings account and allows for withdrawals but doesn’t have tax benefits.

How to obtain a PRAN number?

Eligibility criteria

If you are an Indian citizen who is at least 18 years old, you can enroll in the NPS anytime and get a PRAN number. However, you cannot join after turning 60. Starting early is important because it helps your wealth grow through compounding. The sooner you begin, the more your pension wealth will increase. Once your account is opened, you will receive a “Welcome Kit” by mail, which includes your Permanent Retirement Account Number (PRAN) and other account details. 

When you apply for registration, you need to make your first contribution at any POP-SP. Here are the contribution requirements:

• Minimum amount per contribution: Rs 500
• Minimum contribution per year: Rs 6,000
• Minimum number of contributions: 1 per year

You can choose how often to make contributions throughout the year, provided you meet the minimum requirement of one contribution per year.

Application process

You can follow an online or offline process to obtain a Permanent Retirement Account Number (PRAN) and complete your PRAN number registration.

Here are the steps for both methods:

Offline Application Process

• Go to the nearest Point-of-Presence (PoP) location registered with the National Pension System (NPS) network. 
• Collect the Subscriber Registration Form (CSRF) from the PoP officials.
• Complete the form with the necessary details and attach documents such as Aadhaar, PAN, a cancelled cheque, a photograph, and other KYC documents.
• At the PoP, submit your completed form and the initial contribution payment via cash, cheque, or demand draft.
• After successful verification, you will receive your PRAN on your registered email and mobile number. The physical NPS PRAN card will be dispatched to your address within 20 days.

Online Application Process

• Go to the NSDL eNPS website.
• Complete the registration using your Aadhaar or PAN card for KYC verification. You will receive an OTP for authentication on your registered mobile number or email.
• Enter all mandatory details online, including uploading scanned copies of your photograph and signature.
• Pay online to make the initial contribution to your NPS account.
• Your PRAN will be generated upon successful registration. You can print or save a copy for future reference.

Benefits of Having a PRAN Number

Your Permanent Retirement Account Number (PRAN) simplifies managing your pension account under the National Pension System (NPS).

Here’s how it helps you:

Simplified Pension Management

Your PRAN number is a unique ID that helps you track your pension contributions, withdrawals, and other transactions. This means everything related to your account is accurately recorded and easy to find.

With your PRAN, you can check your pension contributions, investment details, and more online or at designated Points of Presence (POPs). This helps you plan your finances better as you prepare for retirement.

The PRAN system makes it easy to deposit your pension contributions, whether from you or your employer. This ensures your money goes into your retirement savings on time and accurately.

Portability and Accessibility

• Your PRAN stays the same throughout your life, making it simple to transfer your NPS account if you move or change jobs. This way, you don’t have to open a new account when relocating.
• You can access your NPS account anywhere in India using your PRAN number. This is especially helpful if you need to manage your account while traveling or away from home.
• Your PRAN is a single ID for tier-I and II NPS accounts. This simplifies account management and ensures that all transactions are linked to you.

Linking PRAN Number with Your Retirement Plan

Linking a Permanent Retirement Account Number (PRAN) with life insurance products, such as those provided by Shriram Life Insurance, can enhance financial security for retirees. Your PRAN number can be linked to your life insurance policies to purchase an annuity. An annuity is a monthly payment that you will receive after retirement. The annuity you receive will depend on the amount you invested, the type of plan you choose, and your insurance service provider. 

You can link the PRAN number with your Life Insurance using the following method:

1. Exit the NPS by giving an exit request and allocate at least 40% of your corpus fund to purchase an annuity plan.
2. Link your PRAN with your life insurance policy to enjoy additional benefits. You can invest your money in Shriram Life Insurance plans such as the Early Cash Plan (ECP), Assured Income Plan (AIP), etc.

Integration with Life Insurance Products

Comprehensive Financial Security

• Shriram Life Insurance is listed as an Annuity Service Provider (ASP) for the National Pension System (NPS). This means that as an NPS subscriber, you can use your accumulated corpus upon retirement to purchase annuity plans from Shriram Life and receive a steady income stream. 
• Shriram Life provides various annuity options, such as the Immediate Annuity Plus plan, which provides flexible financial solutions for maintaining your lifestyle post-retirement. 
• Additionally, products like the Shriram Life Pension Plus allow you to build a retirement corpus while enjoying insurance protection. This plan provides long-term coverage and loyalty additions, enhancing the financial security provided by the NPS.

Monitoring and Managing Contributions

Benefits of Using PRAN

• With a PRAN, you can monitor your retirement contributions and investment growth. This transparency helps you make informed decisions regarding additional contributions or changes in your investment strategy.
• PRAN enables easy management of tier-I and tier-II NPS accounts, allowing you to adjust your contributions based on financial goals and market conditions.
• By linking PRAN with annuity services like those that Shriram Life provides, retirees can easily convert their NPS savings into regular pension payments, ensuring a smooth transition from active earning years to retirement.
• For those considering the combination of insurance and retirement savings, check out our life insurance with pension benefits (Shriram Life Pension Plus) product, which provides a comprehensive approach to financial security.
• In addition, exploring flexible pension plans can help you tailor your retirement payouts to fit your lifestyle needs. Lastly, don’t forget to review the tax benefits on retirement plans that can further enhance your savings strategy.

Common Issues and Solutions

Lost or Misplaced PRAN Number

If you have lost or misplaced your PRAN number, here’s what you can do:

• Fill out Form S2, requesting the reissue of a PRAN card.
• Submit the completed form to your concerned Drawing and Disbursing Officer (DDO).
• After verifying the form, the associated Nodal Office will process your request in the Central Recordkeeping Agency (CRA) System.

Errors in PRAN Details

To correct inaccuracies in your PRAN information, you need to use NPS Form S2. 

Here’s how to do it:

• Get Form S2
• Use the following sections in your form to change the details you want

1. Section A to update your personal details.
2. Section B to change your nominee details
3. Section C to request a reissue of your I-PIN and T-PIN
4. Section D to reissue your PRAN card

• Include identity proof, address proof, and a cancelled cheque if updating bank details.
• Send the completed form and documents to your Nodal Office or POP-SP.
• The Nodal Office or POP-SP will check your details and process your request.

Conclusion

In summary, the Permanent Retirement Account Number (PRAN) is essential for anyone using the National Pension System (NPS). It acts as a unique ID, making it easier to manage your retirement savings and track all transactions. Understanding PRAN's benefits can improve your retirement planning. Additionally, linking your PRAN to life insurance schemes from Shriram Life Insurance can enhance your financial security. 
If you're planning for retirement, look into flexible pension plans and the tax benefits it provides.