National Pension Scheme 2020 – On 23 August 2003, the Interim Pension Fund Regulatory & Development Authority (PFRDA) was established the national pension scheme or also called the national pension system.
Main Agenda behind national pension scheme:
National Pension Scheme 2020
Pension scheme gives financial security and solidity during old age when people don’t have a source of income. Retirement plan tells that people live with satisfaction and without compromising on their standard of living after retirement years.
Who can get the national pension scheme (NPS):
NPS is applicable to all employees of Central Government service, except military and Central Autonomous Bodies joining Government service on or after 1st January 2004.
Any other government employee who is not under NPS can also sign in to NPS under “All Citizen Model” from a Point of Presence – Service Provider (POP-SP) Website
Advantage of national pension scheme:
- It is a cost-effective system where the pension is directly transferred directly into the National Pension Scheme.
- The form filling process is also very simple and anybody can easily fill it.
- It is portable in such a way that each employee gets a unique PRAN no. (Permanent Retirement Account Number)
- The charges are standard as per the authority sanctioned.
- Opening charges: Rs 50
- Annual maintenance charge per account: Rs190
- Transaction charges: Rs4
How the National pension scheme works:
The funds are locked in till you are 60 years and on retirement, then you are ready to a lump sum payment, with at least 40% used to buy annuities that will earn a monthly pension. The only freedom is that an individual can withdraw 25% of the contribution before he or she turns 60.
Which fund manager you can select?
You can choose your fund manager for investment from a list of seven – UTI, LIC, SBI, IDFC, ICICI Prudential, Kotak Mahindra and Reliance Capital. Annual portability is allowed free of cost. You can choose between equity and pure debt.
Calculation of National pension scheme?
The Net Promoter Score is finding out by the difference between the percentage of Promoters and Detractors. The NPS is not expressed as a percent value but as an absolute number lying between -100 and +100.
Is Investment in NPS is better?
NPS also gives for additional tax benefit of Rs 50,000 under Section 80CCD(1B). However, investors can withdraw from NPS only after the retirement at 60. This may we called as long-term benefits for betterment during the old age.
National Pension scheme is introduced for the betterment of the government employee who gives their unexceptional contribution to the nation.
This scheme also tells how government body takes care of their employee even after retirement also in order to maintain their standard of living high. This scheme returns increases as their allocated tier and also as per increase in the years.