National Pension System

National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme. The NPS has been designed to enable systematic savings during the subscriber's working life.. It is an attempt towards finding a sustainable solution to provide adequate retirement income to every citizen of India.

What is National Pension System?

Government of India established Pension Fund Regulatory and Development Authority (PFRDA)- External website that opens in a new window on 10th October, 2003 to develop and regulate pension sector in the country. The National Pension System (NPS) was launched on 1st January, 2004 with the objective of providing retirement income to all the citizens. NPS aims to institute pension reforms and to inculcate the habit of saving for retirement amongst the citizens. Initially, NPS was introduced for the new government recruits (except armed forces). With effect from 1st May, 2009, NPS has been provided for all citizens of the country including the unorganised sector workers on voluntary basis.

Why Invest in the New Pension Scheme?
Maintain Living Standards

Good Retirement

It helps you set aside money for your retirement.

Low on Price

Lifetime Commitment

A compulsory investment in annuity means you get a pension even after you retire.

Rider Benefits

Good Management

Fund managers manage your money invested in equity, ensuring that you get good returns over the long term.

Tax Benefits

Tax Benefits

You get tax deductions on your salary, if you invest in the NPS. The amount accumulated in the NPS is not taxed.

Types of National Pension Schemes (NPS):

• Tier-I Account: It is a basic pension account with limitations on withdrawal
*Before attaining 60 years of age, only 20% of the contribution can be withdrawn while the rest 80% has to be necessarily used for buying annuity from a life insurer. Annuity is a series of payments made at fixed intervals of time. Annuity plans necessitate the insurer to pay the insured income at regular intervals until his death or till maturity of the plan.
*After attaining the age of retirement also (60 years), close to 60% contribution can be withdrawn and the rest 40% again has to be used to purchase annuity from approved life insurers.

• Tier-II Account: It is a voluntary savings option from which a person can withdraw money limitless.


It is Transparent

NPS is transparent and cost effective system wherein the pension contributions are invested in the pension fund schemes and the employee will be able to know the value of the investment on day to day basis.

It is Simple

All the subscriber has to do, is to open an account with his/her nodal office and get a Permanent Retirement Account Number (PRAN).

It is Portable

Each employee is identified by a unique number and has a separate PRAN which is portable i.e., will remain same even if an employee gets transferred to any other office.

It is Regulated

NPS is regulated by Pension Fund Regulatory and Development Authority- External website that opens in a new window, with transparent investment norms & regular monitoring and performance review of fund managers by NPS Trust- External website that opens in a new window.

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