INTRODUCTION
National Pension System (NPS) is basically a voluntary retirement savings scheme launched by Government. This scheme allows the beneficiaries to make defined contribution towards planned savings. Thereby the scheme helps the beneficiary in securing the future in the form of Pension. Undoubtedly it is an effort towards a sustainable solution to the problem of providing adequate retirement income to every citizen . Ministry of finance(Department of Economic affairs) introduced National Pension Scheme (NPS) for Central Government employees.Ministry introduced this scheme vide notification No. 5/7/2003- ECB & PR dated 22nd December, 2003. Ministry has made NPS mandatory for all new recruits to the Central Government service (except the armed forces) from 1st January, 2004.
WHO CAN JOIN NPS?
A citizen of India whether resident or Non-resident who is between 18-70 years of age on the date of submission of his/her application.As well as applicant should follow the KYC(Know Your Customer) norms to apply for NPS.
Enrolment agency
Not only employers but also PoPs(Point of Presence) may enroll and contribute under NPS for corporate employees. SimilarlyNodal officers enroll and contribute for Govt. employees. POPs or through eNPS enrolls the same for other individuals. Several financial institutions also act as POPs. Ministry has enrolled Most banks, both private and public sector as POPs. The authorized branches of a POP, called point of presence service providers (POP-SPs), act as the collection points.
How Can a person find a POP near him?
The Government of India has decided to launch the NPS for all citezens of India from 1st May 2009 . Government provides facilities to all citizens across the country for the successful as well as seamless implementation of NPS. These facilities may include opening permanent retirement account for contributing to NPS.In NPS nomenclature we call these beneficiaries as “Subscribers”.Government is facilitating these processes through the body known as Point of Presence(POP) appointed by the PFRDA.
The person may find the POP near him through the website of Pension Fund Regulatory and Development Authority(PFRDA).
Documents needed to join the NPS
- An individual may apply NPS by submitting the subscribers registration form. Proof of identity, address and date of birth also needs to be submitted to the POP.
Benefits of NPS Account:-
- Flexibility: Applicant can choose in particular his/her own investment option and Pension Fund or select Auto choice to get better returns.
- Easy and simple: An applicant may open an account with any of the POP being governed by all Post Offices across India and he may easily get the Permanent Retirement Account Number.
- Low Cost: NPS is the world’s lowest cost pension scheme.Fund management fees and other administrative charges are also low.
- Portablity:An applicant may operatae his account from anywhere in India.He may pay his contribution through any of the POPs irrespective of the POP-SP branch with whom he has registered. Even if a subscriber changes his city, job etc, he may make his contribution through eNPS or mobile app.
Important features of NPS:-
–Partial withdrawal-As specified in the regulation , a subscriber may withdraw up to 25% of their own contribution at any time before exit from NPS Tier-1 for a maximum of three times.NPS allow the Partial withdrawals from NPS Tier-1 after contributing for at least 10 years.There should be a gap of minimum 5years between successive withdrawals.
–NPS provides access and portability by online access of the pension account to the NPS subscribers through web portal and mobile app.
Steps to Open an NPS Account
Following are the steps to open NPS account online:-
Step 1.Visit the Official website of eNPS. https://enps.nsdl.com/eNPS/NationalPensionSystem.html
Step 2.Before making contribution we need to register for the scheme. For this click on “National Pension Scheme”on right side of Home page.
