All About National Pension Schemes
Published On Jun 23, 2021, Updated On Jun 25, 2021
Table of Contents
- What Is The National Pension Scheme?
- National Pension Scheme Eligibility Criteria
- Benefits Of National Pension Scheme
- Take Away
Old Age is the most crucial stage of life, it is that period when you bid goodbye to a lot of things you have been associated with, for a very long time, your job being the first, in India 60-62 is the retirement age and superannuation is undoubtedly a phase with needs prior planning so that you can live smoothly even after your retirement.
Pension is the key to a good future after retirement. Pension funds offer financial self-sufficiency in old life when people do not have a positive cash flow. Retirement planning guarantees that individuals live with respect and without sacrificing their level of living as they age.
Upon retirement, a pension system allows you to invest and save money while receiving a lump sum as financial security through an investment account but not everyone has a government job to enjoy the perks of pension but fret not because with the National Pension Scheme you can enjoy the perks of retirement just with a small investment.
What Is The National Pension Scheme?
On October 10, 2003, the Government of India formed the Pension Fund Regulatory and Development Authority (PFRDA)- An External website that opens in a browser window to strengthen and administer the country's pension industry. On January 1, 2004, the National Pension System (NPS) was established with the goal of providing retirement income to all people.
The National Pension Scheme (NPS) intends to implement pension reforms and instil in citizens the habit of retirement planning. NPS was first intended for new govt recruits (except armed forces). NPS has been made available on a voluntary basis to all inhabitants of the nation, including disorganized sector employees, starting on May 1, 2009.
National Pension Scheme Eligibility Criteria
Following are the conditions which one must fulfil in order to be eligible for the National Pension Scheme -
Employees of the Central Government
It applies to all new Central Government workers (excluding the Armed Forces) and Central Autonomous Bodies who join the government on or after January 1, 2004.
Employees of the State Government
It applies to all workers of State Governments and State Autonomous Bodies who begin work after the date specified by the relevant State Government.
A corporation would have the option of making investment decisions at the subscriber level or at the company level for all of its fundamental subscribers.
All Indian nationals seen between ages of 18 and 60 on the date of application to a Point of Presence (POP) / Point of Presence-Service Provider (POP-SP) can enter NPS.
Swavalamban Yojana for Unorganized Sector Workers
A citizen of India between the ages of 18 and 60 on the date of application, who works in the unorganised sector or is not employed by the Central or state governments, or an autonomously body/public private enterprise of the Central or state governments, can create an NPS-Swavalamban account.
Benefits Of National Pension Scheme
Key benefits offered by the National Pension Scheme are as follows -
Transparent In Nature
NPS is a transparent and cost-effective system in which pension contributions are invested in pension fund schemes and employees may see the value of their investments on a daily basis.
All the subscriber needs to do is create an account with his or her nodal office and obtain a Permanent Retirement Account Number (PRAN). It is transportable.
Uniform In Nature
Each employee is recognised by a special code and has a distinct PRAN that is portable, which means that it will remain the same even if an operator is reassigned to another office.
It Is Well Regulated By Authorities
It is governed by the Pension Fund Regulatory and Development Authority- External webpage that loads in a new window, and it has transparent investing guidelines as well as frequent monitoring and performance reviews of every individual and organization connected.
The government aims to create awareness regarding saving for the future by implementing the National Pension Scheme and it is highly advised to all government as well as non-government and corporate employees to invest their hard-earned money and save it for their post-retirement plans.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.