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    National Pension Scheme

    National Pension Scheme (NPS), a government-sponsored pension scheme, was launched in January 2004 for government employees. It was opened to all sections in 2009. A subscriber can contribute regularly in a pension account during her working life, 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.

    Top Performing NPS Schemes

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    Most Consistent NPS Schemes

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    FAQs on NPS

    What is National Pension System (NPS)?›

    National Pension Scheme (NPS) 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.

    Who can join NPS?›

    Any Indian citizen between 18 and 60 years can join NPS. The only condition is that the person must comply with know your customer (KYC) norms.

    Can a Non Resident Indian (NRI) join NPS?›

    Yes, an NRI can join NPS. However, the account will be closed if there is a change in the citizenship status of the NRI.

    How do I join NPS?›

    You should open an NPS account with entities known as Point of Presence (POP). Most banks, both private and public sector, are enrolled as POPs. Several financial institutions also act as POPs. The authorized branches of a POP, called point of presence service providers (POP-SPs), act as the collection points.

    How can I find POPs near me?›

    You can access them through the website of Pension Fund Regulatory and Development Authority (PFRDA). https://www.npscra.nsdl.co.in/pop-sp.php

    What are the documents needed for opening an NPS account?›

    You should fill the subscriber registration form and submit it along with proof of identity, address, and date of birth to the POP.

    What is a Permanent Retirement Account Number (PRAN)?›

    Every NPS subscriber is issued a card with 12-digit unique number called Permanent Retirement Account Number or PRAN.

    What are Tier-I and Tier-II accounts›

    NPS offers two accounts: Tier-I and Tier-II accounts. Tier-I is a mandatory account and Tier-II is voluntary. The big difference between the two is on withdrawal of money invested in them. You cannot withdraw the entire money from Tier-I account till your retirement. Even on retirement, there are restrictions on withdrawal on the Tier-I account. The subscriber is free to withdraw the entire money from the Tier-II account.

    Can I have more than one NPS account?›

    No, you cannot open multiple NPS accounts. In fact, there is no need to open a second account as NPS is portable across sectors and locations.

    What is the minimum contribution in NPS?›

    You have to contribute a minimum of Rs 6,000 every year in your Tier-I account in a financial year.

    What will happen if I don't make the minimum contribution?›

    If you do not contribute the minimum amount, your account will be frozen. You can unfreeze the account by visiting the POP and pay the minimum required amount and a penalty of Rs 100.

    Will the government also contribute to my NPS account?›

    No, the government will not contribute to your NPS account.

    Who manages the money invested in NPS?›

    The money invested in NPS is managed by PFRDA-registered Pension Fund Managers. At the moment, there are eight pension fund managers: ICICI Prudential Pension Fund, LIC Pension Fund, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund, SBI Pension Fund, UTI Retirement Solutions Pension Fund, HDFC Pension Management Company, and DSP BlackRock Pension Fund Managers.

    What are the investment choices available in NPS?›

    The NPS offers two choices:
    • 1. Active Choice: This option allows the investor to decide how the money should be invested in different assets.
    • 2. Auto choice or lifecycle fund: This is the default option which invests money automatically in line with the age of the subscriber.

    What are the investment options available under Active Choice?›

    The Active Choice offers three funds or investment options: Asset Class E (invests 50 per cent in stocks); Asset Class C (invests in fixed income instruments other than government securities); Asset Class G (invests only in government securities). An investor can choose one of these funds or opt for a combination of them.

    Can I change my investment choices?›

    Yes, you can change your investment choices once in a financial year for both Tier-I and Tier-II accounts.

    Can I change my scheme and pension fund managers?›

    Yes, you can change your scheme preference and pension fund manager. You can even change your investment option (active and auto choices).

    Can I have different pension fund managers and investment option for Tier I and Tier II account?›

    Yes, you can select different pension fund managers and investment options for your NPS Tier I and Tier II accounts.

    What are the tax benefits available for NPS?›

    • 1. An employee's own contribution is eligible for a tax deduction --up to 10 per cent of the salary (basic plus DA) - under Section 80CCD(1)
    • 1. of the Income Tax Act within the overall ceiling of Rs 1.5 lakh allowed under Section 80C and Section 80CCE.
    • The employer's contribution to NPS is exempted under Section 80CCD
    • 2. Moreover, individuals can claim an additional deduction of up to Rs 50,000 under Section 80CCD (1B), which is in addition to Rs 1.5 lakh permitted under Section 80C.
    • 3. A self-employed person can also contribute 10 per cent of his gross income under Section 80CCD (1) in NPS.

    When can I withdraw money from NPS?›

    NPS is a pension product. So, you are expected to stay invested until your retirement. At 60, you must use at least 40 per cent of the corpus to buy an annuity income from a PFRDA-listed insurance company. You have the option to withdraw 40 per cent of the corpus tax-free. You can withdraw the remaining 20 per cent of the corpus (it will be taxed as per the income tax slab applicable to you) or use it to buy annuity.

    Can I defer withdrawing the lumpsum amount at 60?›

    Yes, you can defer withdrawing the lumpsum amount in NPS until you are 70 years old.

    What if I want to take the money out before I am 60?›

    If you are getting out of the scheme before you are 60 years old, you can only withdraw 20 per cent of the accumulated corpus in NPS. You must use 80 per cent of the corpus to buy an annuity.

    What happens to the money if I discontinue the scheme?›

    If you discontinue your investment, your account will be frozen. You can reactivate the account only if you make the minimum contribution required along with the penalty.

    What happens if the subscriber dies before 60 years?›

    If the subscriber dies before 60 years, the entire accumulated wealth would be paid to the nominee/legal heir of the subscriber.

    How do I withdraw the money from NPS?›

    You will have to submit the withdrawal application to the POP along with relevant documents. POP would authenticate the documents and forward them to Central Record-keeping Agency (CRA) and NSDL. CRA would register your claim and forward you the application form along with details of documents that need to be submitted. Once you complete the necessary procedure, CRA processes the application and settles the account.

    What are the documents to be submitted along with withdrawal forms?›

    You have to submit the following documents along with the withdrawal forms:
    • 1. PRAN card (original)
    • 2. Attested copy of proof of identity
    • 3. Attested copy of proof of address
    • 4. A cancelled cheque

    What is an annuity?›

    An annuity provides a regular income (it could be monthly, quarterly, annual, etc) at a specified rate for a specified period chosen by the subscriber. In NPS, a subscriber must use at least 40 per cent of the corpus to buy an annuity. It means the person can pay the money to an Annuity Service Provider (ASP) and choose an annuity option to ensure a regular income after retirement.

    Who are the Annuity Service Providers?›

    Currently, these insurance companies are empanelled by PFRDA as ASPs:
    • 1. Life Insurance Corporation of India
    • 2. SBI Life Insurance
    • 3. ICICI Prudential Life Insurance
    • 4. Bajaj Allianz Life Insurance
    • 5. Star Union Dai-ichi Life Insurance
    • 6. Reliance Life Insurance
    • 7. HDFC Standard Life Insurance

    What are the different annuity options offered by ASPs?›

    Here are some generic annuity options offered by ASPs. Remember, some ASPs may offer a slightly different or combination of these options:
    • 1. Pension (annuity) payable for life at a uniform rate to the subscriber
    • 2. Pension (annuity) payable for 5, 10, 20 years certain and thereafter as long as you are alive
    • 3. Pension (annuity) for life with return of purchase price on death of the subscriber
    • 4. Pension (annuity) payable for life increasing at a simple rate of 3 per cent
    • 5. Pension (annuity) for life with a provision of 50 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber
    • 6. Pension (annuity) for life with a provision of 100 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber
    • 7. Pension (annuity) for life with a provision of 100 per cent of the annuity payable to spouse during his/her lifetime on death of the subscriber and with return of purchase price on death of the spouse.

    How is the annuity income taxed?›

    The annuity income will be added to your income and taxed as per the income tax slab applicable to you.

    All about NPS

    Reintroduction of OPS will be win-win for both employees, government: Staff associations

    Central Secretariat Service officers demand the return of the Old Pension Scheme, labeling both the National Pension System and the new Unified Pension Scheme as inadequate for government employees. They argue that the OPS provides more secure benefits and pension guarantees, asserting it is their right and essential for optimal employee performance.

    Centre to unveil new simplified pension application form for retiring employees

    The Centre will launch a simplified pension application form for retiring employees on Friday, integrating it into Bhavishya/e-HRMS. The form will streamline the submission process with end-to-end digitisation, aimed at promoting paperless operations and ease for pensioners. Union Minister Jitendra Singh will officiate the launch.

    UPS an 'improvement' over NPS: FM

    Finance Minister Nirmala Sitharaman has introduced the Unified Pension Scheme (UPS) as an improvement over the National Pension Scheme (NPS), emphasizing it is not a return to the Old Pension Scheme (OPS). The UPS guarantees a monthly pension of 50% of the average basic pay for central government employees with a qualifying service of 25 years.

    UPS a new scheme, not rollback of NPS as claimed by Congress: Sitharaman

    Finance Minister Nirmala Sitharaman defended the newly launched Unified Pension Scheme (UPS) against Congress accusations of misinformation, clarifying it is not a rollback but an improved pension scheme for government employees. The UPS guarantees 50 per cent of average basic pay over the last 12 months before retirement, addressing concerns over the National Pension System (NPS). The scheme requires employee contributions and aims to satisfy most government employees, with a focus on long-term benefits.

    More than 1.36 lakh WR and CR employees to benefit from UPS: Officials

    ​​Employees under National Pension Scheme opting for UPS will be eligible for an assured pension of 50 per cent of the average basic pay drawn over the last 12 months before superannuation; the minimum qualifying service has been kept at 25 years. Central Railway has 96,039 employees currently, of which 70,778, or 73.69 per cent, are New Pension Scheme subscribers, who will benefit from UPS, said general manager Ram Karan Yadav.

    Over 23 lakh govt employees under NPS get option to choose unified pension scheme

    According to the scheme approved by the Union Cabinet, the pension will be proportionate for a lesser service period of up to a minimum of 10 years. Also, assured pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service.

    Ahead of polls, Maharashtra becomes first state to approve Unified Pension Scheme

    The Maharashtra Cabinet has given the nod to the central government's Unified Pension Scheme, starting April 1, 2025. This scheme integrates features of both the old and new pension systems, offering a guaranteed pension amount. Employees with 25+ years of service will receive 50% of their last salary, along with inflation-adjusted increases.

    Will you pay lower tax in the new income tax regime

    Sudhir Kaushik of TaxSpanner.com tells readers how they can optimise their tax by rejigging their incomes and investments.

    People's power has prevailed, says Congress chief Mallikarjun Kharge on UPS

    The Union Cabinet approved the Unified Pension Scheme for central government employees. Congress president Mallikarjun Kharge supported the decision, highlighting the government's recent policy reversals. Congress leader Praveen Chakravarty praised the scheme for offering a minimum guarantee for retired families, addressing shortcomings of the former National Pension Scheme.

    States should implement UPS soon, says JCM Secy

    State governments were encouraged to adopt the Unified Pension Scheme (UPS) following Union cabinet approval. The UPS assured a minimum pension of ₹10,000 monthly for central employees with over 25 years of service. Those under the National Pension System could shift to the UPS, which increased government contributions to 18.5%.

    UPS could shake up NPS

    A new pension scheme may affect the National Pension System (NPS) if central government employees switch to the Unified Pension Scheme (UPS). Currently, NPS has a significant corpus contributed by central and state employees. The transition to UPS is anticipated on April 1, 2025, which may reshape pension fund management.

    UPS vs NPS vs OPS: How the three pension calculation schemes differs from one another

    In a major benefit for 23 lakh central government employees, the Modi government has introduced a new Unified Pension Scheme (UPS), that assures a pension of 50% of the basic salary for those who joined the service after January 1, 2004, under the National Pension System (NPS). This new scheme will take effect from April 1, 2025. NPS subscribers now have the option to switch to UPS, which provides this assured pension starting from the next financial year.UPS vs NPS vs OPS: How the three pension calculation schemes differs from one another

    Unified Pension Scheme: Understand UPS in 10 simple points

    The Cabinet on Saturday approved the Unified Pension Scheme (UPS) for 23 lakh central government employees. The UPS ensures that all central government employees receive 50 per cent of their last drawn salary from the past 12 months as pension who have served for 25 years or more. Additionally, they will also be eligible for post-retirement inflation-linked increments in their pension amount. Cabinet Secretary-designate TV Somanathan said that the new scheme will come into effect on April 1, 2025, and its benefits will be applicable to those retiring by March 31, 2025, including the payment of any arrears. The employees will have an option to opt for the UPS or NPS from the upcoming financial year.Unified Pension Scheme: Understand UPS in 10 simple points

    UPS: The perfect fusion of NPS and OPS? Here's what government says

    The Unified Pension Scheme (UPS) provides retirees with a fixed pension amount, ensuring a steady, predetermined income after retirement. Central government employees with 25 years or more of service will receive 50% of their last drawn salary from the past 12 months as their pension, which will be adjusted for inflation. Employees with at least 10 years of service will receive a proportional pension, with a guaranteed minimum of ₹10,000 per month.

    'U' in UPS stands for Modi govt's U-turns: Congress' swipe after Unified Pension Scheme announcement

    The Congress took a jab at the Modi government following the approval of the Unified Pension Scheme (UPS) guaranteeing 50% of salary as pension for employees who joined after January 1, 2004. The scheme includes a minimum pension of Rs 10,000 per month, fulfilling long-standing employee demands and providing financial security to central and state employees.

    UPS vs NPS vs OPS: How the three pension schemes stack up against one another

    The Modi government has introduced a new Unified Pension Scheme (UPS) offering a 50% assured pension for central government employees who joined after January 1, 2004, under the National Pension System (NPS). This scheme, effective from April 1, 2025, allows NPS subscribers to switch to UPS, securing an assured pension starting from the next financial year. The move comes as several non-BJP states have reverted to the DA-linked Old Pension Scheme (OPS), with growing demands for similar changes elsewhere.

    Unified Pension Scheme ensures dignity, financial security for govt employees: PM Modi

    Prime Minister Narendra Modi announced the Union Cabinet's approval of the Unified Pension Scheme, which guarantees 50% of the average last-drawn salary as a pension for government employees under the National Pension System. This new scheme starts from the next financial year and requires a minimum of 25 years of service for full benefits.

    Unified Pension Scheme: Cabinet approves assured 50% of salary as pension for govt employees

    The Union Cabinet, chaired by PM Narendra Modi on Saturday approved the Unified Pension Scheme (UPS), which aims to provide assured pension, family pension and assured minimum pension to government employees.Unified Pension Scheme: Cabinet approves assured 50% of salary as pension for govt employees

    How mutual fund SIP, NPS can help in achieving financial freedom

    Mutual fund SIPs and the NPS can help achieve financial freedom through early investment, compounding and strategic fund selection. Emphasis was also placed on portfolio diversification and the importance of aligning investments with personal risk tolerance and financial goals for long-term independence.

    NPS schemes beat over 200 mutual funds in last one year. Should you switch sides?

    NPS schemes delivered higher average returns than over 200 equity mutual funds in the past year, with Tata Pension Management at the forefront. Experts caution that comparing the two over just a year may not offer a full understanding for informed investment decisions. NPS remains a robust retirement option.

    Data Sources: Mutual Funds, ETFs, and NPS data are sourced from Value Research

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