State Gov
State-administered NPS for employees of State Governments and notified state bodies. Contribution rates, vesting, and exit conditions vary by state notification.
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State Government NPS applies to employees of State Governments and State Autonomous Bodies where NPS has been adopted. Cut-off dates vary by state, and some states continue to operate the Old Pension Scheme or have opted into the Unified Pension Scheme (UPS) instead.
Employees of State Governments that have adopted NPS are covered under the Government Sector NPS model. Most State Governments adopted NPS for new recruits gradually after the Central Government's 2004 implementation, with each state notifying its own cut-off date for switching from the Old Pension Scheme (OPS).
The Government Sector NPS applies to eligible State Government employees and to State Autonomous Bodies that have adopted NPS. Employees who joined before the state's NPS cut-off date generally remain under OPS subject to service rules. A few states have also opted into the Unified Pension Scheme (UPS) which combines features of OPS and NPS.
Enrolment is handled by the employee's state nodal office (DTO/DDO) through the Central Recordkeeping Agency. The Subscriber Registration Form is submitted with KYC documents, and contributions are routed through the State Government's nodal office once a PRAN is generated.
Identity proof (Aadhaar, PAN, Passport, Voter ID, or Driving Licence), address proof, PAN card, bank account proof (cancelled cheque or passbook), recent passport-size photograph, signature, and active mobile number and email ID are required. Service details and the state cadre are captured by the state nodal office.
On successful registration the Central Recordkeeping Agency issues a unique 12-digit Permanent Retirement Account Number (PRAN). The PRAN stays with the subscriber even on inter-state transfer, cadre change, or movement between State and Central Government, ensuring continuity of retirement savings.
Source notes: Chapter 5 - Types of NPS Accounts and Variants - Chapter 14 - NPS for Different User Segments. Verify current rules from official sources before acting.
State Government employees generally follow investment choices prescribed under NPS government-sector guidelines. Available options usually include the Default Government Scheme, Scheme G, LC25, and LC50, with the exact set depending on the state's implementation.
State Government subscribers can choose from PFRDA-empanelled Pension Fund Managers - primarily SBI Pension Funds, LIC Pension Fund, and UTI Retirement Solutions for the default scheme, with the available set depending on the state's NPS notification and PFRDA guidelines.
Contributions are invested across Equity (E), Corporate Debt (C), and Government Securities (G). Equity exposure is generally capped at 50% under LC50 and 25% under LC25 for State Government employees. Asset Class A (Alternatives) was discontinued and merged into other schemes effective January 2026.
Most states offer the Default Government Scheme, Scheme G (100% Government Securities), LC25 (up to 25% Equity), and LC50 (up to 50% Equity) to their employees. The exact options available depend on the state's NPS implementation and PFRDA guidelines - some states restrict employees to the default pattern.
Subscribers should compare PFMs across 3-year, 5-year, and since-inception returns rather than only recent 1-year performance. For state government employees with primarily debt-heavy allocations, strong Corporate Debt (C) and Government Securities (G) performance matters more than equity performance alone.
Government sector subscribers can change the Pension Fund Manager once per financial year and can adjust investment choice or scheme preference up to four times per financial year. Government sector subscribers are generally limited to making these changes in their Tier II accounts.
Source notes: Chapter 8 - Investment Options Under NPS - Chapter 9 - Pension Fund Managers. Verify current rules from official sources before acting.
State Government employees contribute 10% of Basic Pay plus DA to the Tier I NPS account. The State Government's employer contribution is prescribed by the state - many states have adopted the 14% rate matching the Central Government, though implementation may vary.
The State Government employee contributes 10% of Basic Pay plus Dearness Allowance (DA) to the Tier I NPS account. The contribution is deducted at source through payroll and credited to the subscriber's PRAN through the State Government's nodal office.
The State Government contributes the prescribed employer contribution to the employee's Tier I account - many states have adopted 14% of Basic Pay plus DA matching the Central Government rate, though implementation may vary between states. A few states still use 10% or other prescribed rates.
Both contributions are credited to the Tier I retirement account. Tier I has no upper limit on contribution amount, and a state employee can additionally make voluntary contributions in Tier I or open a Tier II account for flexible savings (Tier II does not receive employer contribution).
Subscribers can view contribution history, NAV applied, and units allotted through the CRA portal under the Transaction Statement and Holding Statement. The Annual Transaction Statement (ATS) provides a yearly summary of contributions, opening and closing balances, units held, and corpus value.
Units are usually credited within T+1 to T+3 working days after a contribution is reconciled by the Trustee Bank and CRA. Missing or delayed state contributions can be tracked through the CRA portal's transaction history and discrepancies should be raised with the state nodal office.
Source notes: Chapter 7 - Contribution Rules - Chapter 5 - Types of NPS Accounts and Variants. Verify current rules from official sources before acting.
Partial withdrawal from the Tier I account is allowed after three years of NPS membership for specified purposes. Maximum withdrawal is 25% of the subscriber's own contributions, excluding state government contribution and investment gains.
A State Government subscriber can take a partial withdrawal from the Tier I account after completing three years of NPS membership. The maximum is 25% of the subscriber's own contributions - employer/government contributions and investment gains are excluded. Up to four partial withdrawals are permitted before exit.
Partial withdrawal is allowed for higher education of children, marriage of children, purchase or construction of first residential house, medical treatment and hospitalisation for self, spouse, children or dependent parents, disability or incapacitation expenses, and settlement of certain financial obligations against a permitted lien on the NPS account.
Each withdrawal is capped at 25% of the subscriber's own eligible contributions. A minimum gap of four years between successive withdrawals applies before age 60. If the account is continued beyond age 60, the minimum gap reduces to three years.
The partial withdrawal request requires the partial withdrawal form, a self-declaration and supporting documents for the stated purpose (admission letter, medical reports, sale agreement, etc.), and bank account proof for credit. The state nodal office authorises the request in the CRA portal.
The request is initiated by the subscriber through the CRA portal under Manage My Withdrawal, supporting documents are uploaded, and the request is authorised by the state nodal office. After CRA verification, the lump sum is remitted to the registered bank account.
Source notes: Chapter 12 - Withdrawal, Exit, and Liquidity Rules. Verify current rules from official sources before acting.
On normal exit at superannuation, State Government subscribers follow the government sector rules - lump sum and annuity split depends on corpus size. The traditional 60:40 lump sum to annuity structure continues to apply where corpus exceeds Rupees 12 lakh.
For State Government subscribers with corpus above Rupees 12 lakh, up to 60% can be withdrawn as lump sum and a minimum of 40% must be used to purchase an annuity. If corpus is up to Rupees 8 lakh, 100% lump-sum withdrawal is allowed. If corpus is between Rupees 8 lakh and Rupees 12 lakh, up to Rupees 6 lakh can be withdrawn and the balance can be used for annuity or Systematic Unit Redemption (SUR).
Subscribers can defer the lump-sum withdrawal and the annuity purchase after attaining the normal retirement age. The corpus remains invested and continues to earn market-linked returns. Deferment of withdrawal and annuity purchase is permitted up to 85 years of age.
The maximum lump-sum portion is determined by the corpus slab - 100% up to Rupees 8 lakh, up to Rupees 6 lakh in the Rupees 8 lakh to Rupees 12 lakh slab, and up to 60% above Rupees 12 lakh. The lump-sum portion can also be taken in phased instalments through Systematic Lump Sum Withdrawal (SLW/SUR).
The mandatory annuity portion (minimum 40% where corpus exceeds Rupees 12 lakh) is used to purchase an annuity from a PFRDA-empanelled Annuity Service Provider. Available options include life annuity, joint life annuity, annuity with return of purchase price, and increasing annuity. Some states also extend their own family pension and gratuity provisions in parallel.
On death of a State Government subscriber, the nominee or legal heir can claim the accumulated pension wealth. Additional pensionary benefits and family pension provisions under the applicable state service rules may also apply. The NPS corpus is settled according to the exit regulations and applicable state government rules.
Source notes: Chapter 12 - Withdrawal, Exit, and Liquidity Rules - Chapter 13 - Annuity Options. Verify current rules from official sources before acting.
State Government employees can claim deductions on their own contribution under Section 80CCD(1) and the additional Rupees 50,000 under Section 80CCD(1B). The State Government employer contribution is deductible under Section 80CCD(2) and continues to be available under the new tax regime.
An employee's own contribution to NPS Tier I is deductible under Section 80CCD(1), within the overall Section 80C / 80CCE ceiling of Rupees 1.5 lakh. The deduction is generally up to 10% of salary (Basic plus DA) for salaried subscribers under the old regime.
An additional deduction of up to Rupees 50,000 is available under Section 80CCD(1B) for contributions to Tier I, over and above the Rupees 1.5 lakh Section 80C ceiling. This deduction is exclusive to NPS and is available under the old regime.
The State Government's employer contribution to the employee's NPS account is deductible from the employee's taxable income under Section 80CCD(2). For state government employees, the deduction is up to 14% of salary (Basic plus DA) under the new tax regime. This deduction is over and above 80CCD(1) and 80CCD(1B) and remains available under the new regime.
For an employee with Basic plus DA of Rupees 6,00,000 in a state that contributes 14%, the State Government contributes Rupees 84,000 to NPS. The employee can claim this full Rupees 84,000 as deduction under Section 80CCD(2), in addition to their own Rupees 1.5 lakh under 80CCD(1) and Rupees 50,000 under 80CCD(1B) (under the old regime).
Section 80CCD(1) covers the employee's own contribution within the Rupees 1.5 lakh ceiling. Section 80CCD(1B) provides an additional Rupees 50,000 specific to NPS. Section 80CCD(2) covers the state government employer contribution. On exit, up to 60% lump-sum withdrawal from the corpus is tax-exempt under Section 10(12A); annuity income is taxable as per the applicable slab in the year of receipt.
Source notes: Chapter 14 - NPS for Different User Segments - Chapter 5 - Types of NPS Accounts and Variants. Verify current rules from official sources before acting.