National Pension Scheme (NPS)

Question 1

What is National pension scheme ?

Answer 1

It is a govt sponsored pension scheme which was initially launched only for govt employees and then opened to all sections

Question 2

Who manages this scheme ?

Answer 2

PFRDA (Pension Fund Regulatory and Development Authority)

Question 3

How does this scheme function ?

Answer 3

It allows subscribers to contribute regularly in a pension account during their working life . On retirement subscribes can withdraw a part of the corpus in lumpsum and use the remaining corpus to buy an annuity to secure a regular income post-retirement

Question 4

What is the condition to join NPS ?

Answer 4

Any Indian citizen between the age of 18 to 60 yrs can join . Only condition is compliance with KYC norms

Question 5

Can NRI’s join NPS ?

Answer 5

YES , but there account gets closed only if there’s a change in their citizenship status

Question 6

What are the recent changes approved in NPS ?

Answer 6

1) Mandatory contribution by Central Govt raised from 10% to 14% for employees under Tier 1
2) Central Govt employees will be provided with freedom of choice for selection of Pension funds and pattern of investment
3) Entire withdrawal will now be exempted from income tax