What is the full form of NPS
NPS: National Pension System
NPS Stands for National Pension System. It was introduced in January 2004 and is a government-sponsored pension programme for employees of the government. In 2009, it was made available to all sections. A subscriber may make regular contributions to a pension account during her/his working career, withdraw a portion of the corpus in one lump sum, and then utilise the balance to purchase an annuity to ensure a steady income after retirement. It is a voluntary defined contribution retirement savings plan created to give participants the tools they need to make the best decisions for their future by setting aside money consistently while they are employed. The NPS aims to instil in the populace the habit of saving for retirement. It represents an effort to discover a long-term answer to the issue of giving each Indian resident a sufficient retirement income. In the NPS, personal savings are combined into a pension fund, which is then invested by PFRDA-regulated professional fund managers in accordance with approved investment guidelines in diversified portfolios that include stocks, bonds, and other corporate debt obligations in addition to government bonds and bills. Depending on how well the investment performed, these contributions would increase and accrue over time. Accounts in Tier-I and Tier-II categories are available through NPS. Pension accounts with limited withdrawals are classified as Tier-I accounts. Withdrawals and investments are available through the optional Tier-II account. It's only acceptable if the subscriber has a running Tier-I account. Over time, contributions build up until retirement increases with gains that are correlated to the market. When a person leaves their job or retires, at least 40% of their retirement fund must be used to buy a life insurance company's annuity, which will provide them with a pension for the rest of their lives. The remaining funds are paid out in a lump sum.
Salient Features And Benefits
Every subscriber of the National Pension System (NPS) receives a specific Permanent Retirement Account Number (PRAN), which is the foundation of the NPS. The Government of India has enhanced the security of the programme and provided some alluring perks for NPS account holders in an effort to promote savings.
The following advantages are provided by an NPS Account:
A citizen of India, whether a resident or a non-resident, is subject to the following requirements: