national-pension-scheme

Objective of the scheme: 

  • 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.

About the scheme: 

  • Initially the scheme was only for new government recruits.However, With effect from 1st May, 2009, NPS has been provided for all citizens of the country including the unorganised sector workers on voluntary basis.
  • The scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).
  • NPS offers following important features to help subscriber save for retirement:
  • The subscriber will be allotted a unique Permanent Retirement Account Number (PRAN). This unique account number will remain the same for the rest of the subscriber's life. This unique PRAN can be used from any location in India.

Eligibility: Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can join NPS.

  • Central government employees: NPS is applicable to all new employees of Central Government service (except Armed Forces) and Central Autonomous Bodies joining Government service on or after 1st January 2004. 
  • NPS is applicable to all the employees of State Governments, State Autonomous Bodies joining services after the date of notification by the respective State Governments.
  • A Corporate would have the flexibility to decide investment choice either at subscriber level or at the corporate level centrally for all its underlying subscribers. 
  • All citizens of India between the age of 18 and 60 years as on the date of submission of his / her application to Point of Presence (POP) / Point of Presence-Service Provider (POP-SP) can join NPS.
  • Unorganised Sector Workers: He/she should not be covered under social security scheme like Employees' Provident Fund and miscellaneous Provisions Act, 1952, The Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, The Seamen's Provident Fund Act, 1966, The Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955 and The Jammu and Kashmir Employees' Provident Fund Act, 1961.


PRAN will provide access to two personal accounts:

  • Tier I Account: This is a non-withdrawable account meant for savings for retirement.
  • Tier II Account: This is simply a voluntary savings facility. The subscriber is free to withdraw savings from this account whenever the subscriber wishes. No tax benefit is available on this account.

PFRDA - Pension Fund Regulatory and Development Authority

  • The Pension Fund Regulatory and Development Authority (PFRDA), a statutory body, is the pension regulator of India which was established by Government of India on 23 August 2003 and is under the administrative control of Department of Financial Services, Ministry of Finance. 
  • PFRDA promotes old age income security by establishing, developing and regulating pension funds and protects the interests of subscribers to schemes of pension funds and related matters. Currently, PFRDA is regulating National Pension System (NPS) and administering the Atal Pension Yojana (APY).