National Pension System

In News 

• The National Pension System (NPS) has received a setback as two states, Rajasthan and Chhattisgarh have walked out of the system.

National Pension System (NPS)

• About: 
  • It is being administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) set up under PFRDA Act, 2013.
  • It is a voluntary retirement savings scheme laid out to allow the subscribers to make defined contributions towards planned savings thereby securing the future in the form of Pension. 
  • Under NPS, a unique Permanent Retirement Account Number (PRAN) is generated and maintained by the Central Recordkeeping Agency (CRA) for individual subscribers.
  • It is an attempt towards a sustainable solution to the problem of providing adequate retirement income to every citizen of India.
• Eligibility for opening NPS account: 
  • A citizen of India, whether resident or non-resident, subject to the following conditions:
    • Applicants should be between 18 – 70 years of age as on the date of submission of his/her application and should comply with KYC norms prescribed.

Benefits 

• Low Cost:
  • NPS is considered t?o be the world’s lowest cost pension scheme.
  • Administrative charges and fund management fee are also lowest.?

• Simple:
  • All applicant has to do is to open an account with any one of the POPs being run through all Head Posts Offices across india and get a Permanent Retirement Account Number(PRAN).

• Flexible:
  • Applicants can choose his/her own investment option and Pension Fund or select Auto choice to get better returns.
• Portable
  • Applicants can operate an account from anywhere in the country and can pay contributions through any of the POP-SPs irrespective of the POP-SP branch with whom the applicant is registered, even if he/she changes his/her city, job etc and also make contributio?n through eNPS.
  • The accou?nt can be shifted to any other sector like Government Sector, Corporate Model in case the subscriber gets the employment.

Source:IE