National Pension Scheme - Features, Benefits, Details, etc
Updated On Aug 23, 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 critical stage of life; it is the time when you say goodbye to many things you have been associated with for a long time, the first of which is your job. In India, the retirement age is 60-62, and superannuation is unquestionably a phase that requires prior planning so that you can live comfortably even after your retirement.
Pensions are essential for a secure future after retirement. When people do not have a positive cash flow, pension funds provide financial self-sufficiency in old age. Retirement planning ensures that people age with dignity and without losing their standard of living.
When you retire, a pension system allows you to invest and save money while receiving a lump sum as financial security through an investment account. However, not everyone has a government job to enjoy the benefits of a pension, but don't worry because the National Pension Scheme allows you to enjoy the benefits of retirement with a small investment.
What Is The National Pension Scheme?
The Government of India established the Pension Fund Regulatory and Development Authority (PFRDA)- An External website that opens in a browser window on October 10, 2003- to strengthen and administer the country's pension business. The National Pension System (NPS) was formed on January 1, 2004, with the purpose of providing retirement income to all citizens.
The National Pension Scheme (NPS) aims to implement pension reforms and instil the habit of retirement planning in citizens. NPS was initially meant for new government recruits (except armed forces). Beginning on May 1, 2009, NPS was made available on a voluntary basis to all citizens of the country, including unorganised sector employment.
National Pension Scheme Eligibility Criteria
The prerequisites that must be met in order to be eligible for the National Pension Scheme are as follows:
Employees of the Central Government
It applies to all new Central Government employees (except the Armed Forces) and Central Autonomous Bodies hired on or after January 1, 2004.
Employees of the State Government
It applies to all State Government and State Autonomous Bodies employees who commence work after the date designated by the relevant State Government.
For all of its essential subscribers, a corporation would have the choice of making investment decisions at the subscriber or company level.
NPS is open to all Indian nationals between the ages of 18 and 60 on the date of application to a Point of Presence (POP) / Point of Presence-Service Provider (POP-SP).
Swavalamban Yojana for Unorganized Sector Workers
An NPS-Swavalamban account can be opened by any Indian citizen 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 autonomous body/public-private company of the Central or state governments.
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Benefits Of National Pension Scheme
The National Pension Scheme provides the following key benefits:
Transparent In Nature
NPS is a straightforward and premium method in which employees can monitor the value of their investments on a daily basis and pension contributions are invested in pension fund schemes.
The subscriber-only needs to open an account with his or her nodal office and get a Permanent Retirement Account Number (PRAN). It can be transported.
Uniform In Nature
Each employee is identified by a unique code and has a portable PRAN, which means it will remain the same even if an operator is relocated to another office.
It Is Well Regulated By Authorities
It is overseen by the Pension Fund Regulatory and Development Peer to peer External webpage that opens in a new window, and it has transparent investment standards as well as regular contact and performance reviews of every individual and company associated with it.
By adopting the National Pension Scheme, the government hopes to raise awareness about the need for saving for the future. All government, non-government, and corporate employees are strongly encouraged to invest their hard-earned money and prepare for their post-retirement goals.
Also Read:- Popular Life Insurance 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.