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National Pension Scheme

Topics Covered:

  1. Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

 

National Pension Scheme

 

What to study?

For Prelims: Key features, objectives of the scheme.

For Mains: Significance of the scheme and its role in ensuring financial security of the citizens.

 

Context: Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enrol in National Pension Scheme (NPS) at par with Non-Resident Indians.

 

What is National Pension System (NPS)?

  • It is a government-sponsored pension scheme. It was launched in January 2004 for government employees. However, in 2009, it was opened to all sections.
  • The scheme allows subscribers to contribute regularly in a pension account during their working life. On retirement, subscribers can withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement.
  • This system is managed by PFRDA (Pension Fund Regulatory and Development Authority).

 

Who can join NPS?

  1. Any Indian citizen between 18 and 65 years can join NPS.
  2. An NRI can join NPS. However, the account will be closed if there is a change in the citizenship status of the NRI.
  3. Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.

 

Sources: the Hindu.