UPSC Daily Important Topic – 24 September 2021

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