PFRDA launches StAR NPS: How the new digital onboarding process works and charges applicable

Subscribing to the National Pension System (NPS) is set to become easier and more seamless with the launch of StAR NPS, a new digital onboarding platform aimed at making NPS enrolment and contributions more convenient while reducing paperwork and operational delays for new subscribers.

The new platform, developed by BSE Technologies Private Limited (BTPL), has been operationalised for use by Points of Presence (PoPs), which act as intermediaries for NPS enrolment and servicing, according to a circular by PFRDA on Thursday.

“The platform is intended to provide a technology-enabled assisted onboarding journey for NPS subscribers through PoPs and their associated network of various categories of Pension Agents,” it said.

What is StAR NPS?

StAR NPS has been designed as a technology-driven platform that allows PoPs and their distribution partners, such as pension agents and mutual fund distributors, to onboard NPS subscribers through a paperless digital process. The platform facilitates electronic registration, document verification and contribution processing, reducing the need for manual intervention.

The system connects multiple entities within the NPS ecosystem, including Central Recordkeeping Agencies (CRAs) and the Trustee Bank, enabling exchange of subscriber data and transaction information seamlessly. The Pension Fund Regulatory and Development Authority (PFRDA) has clarified that BTPL will act only as a technology service provider and will not undertake any regulated intermediary activities.

How the onboarding process will work

The onboarding process will be carried out through a fully digital process on the ‘StAR NPS’ platform. This is how the entire journey will be carried out:

• The subscriber details will be captured electronically
• KYC will be completed through CKYC or DigiLocker-based verification mechanisms.

Upon successful completion of KYC and onboarding formalities, the subscriber will initiate the first contribution through the platform.

One notable feature is the fund flow mechanism. Instead of routing the funds through PoP accounts, contributions of the subscribers will be remitted directly to the Trustee Bank, the circular noted.

Once funds are received and confirmed, a Permanent Retirement Account Number (PRAN) will be generated through integration with CRA systems.

What are the applicable charges?

PFRDA has clarified that the onboarding journey under the ‘StAR NPS’ platform is an assisted model facilitated through PoPs or their engaged pension agents.

Accordingly, the registration charge has been fixed at ₹200 along with applicable taxes. However, subscribers cannot be charged any amount beyond the prescribed onboarding fee.

“The subscriber shall not be charged any amount over and above the prescribed onboarding charges at the time of registration under this framework,” the circular noted. Additionally, any platform access or utilisation charges imposed by BTPL will have to be borne by the respective PoPs.

Applicability of the new framework

Currently this framework shall be applicable only to:

• Resident Indian individuals
• Individuals aged 18 years and above and up to 85 years

Can investors still choose their pension fund manager and investment option?

PFRDA has also clarified that the introduction of ‘StAR NPS’ does not change choices that are available to subscribers under the scheme.

Investors still have the option to choose their preferred pension fund manager, investment choice, asset allocation pattern, and other related preferences in accordance with the existing framework issued by PFRDA from time to time.

The body has specifically noted that while CRAs may be auto-assigned through a round-robin system, investment-related decisions will remain entirely with the subscriber.

Compliance responsibilities

Although the platform introduces a new digital interface to the onboarding process, PFRDA has clarified that the regulatory and compliance responsibilities of PoPs remain unchanged. PoPs will continue handle key functions such as KYC verification, due diligence, grievance redressal, record maintenance and compliance obligations under anti-money laundering regulations.

The regulator has also specified that pension agents will function only as facilitators and cannot perform regulated intermediary functions. Further, the launch of StAR NPS does not modify the existing rules relating to withdrawals and exits under the NPS framework. Any major changes to the platform's architecture or processes will require prior approval from PFRDA.