NATIONAL PENSION SYSTEM
Topic: Government Schemes in news
WHY IN THE NEWS?
The National Pension System(NPS) will no longer compel investors to convert 40% of their accumulated retirement corpus into an annuity.
WHY SUCH A DECISION?
- Poor yields on annuities and high inflation are translating into negative returns.
- Annuities are taxable, deducting the tax and factoring in inflation means annuities are yielding negative returns.
ABOUT THE NATIONAL PENSION SYSTEM:
- NPS is a government-sponsored pension scheme.
- Launched in January 2004 for government employees.
- It was extended to all citizens of Indian on a voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.
- PFRDA is the statutory authority established by an enactment of the parliament, to regulate, promote and ensure orderly growth of the NPS.
- The scheme allows subscribers to contribute regularly in a pension account during their working life.
WHO CAN JOIN NPS?
- Any Indian citizen between 18 and 60 years can join NPS.
- Must comply with know your customer (KYC) norms.
- An NRI can join NPS.
- Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till age of 65 years.
UPSC Daily Static Quiz 24 September 2021 – Click Here
