NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account and also his employer can also co-contribute for the social security/welfare of the individual.
The Pension Fund Regulatory and Development Authority increased the upper age limit for joining the National Pension System (NPS) from 60 years to 65 years.
Currently, any Indian between the age of 18 to 60 years may voluntarily join the NPS. The Authority observed that due to better healthcare facilities and increased fitness, people are living an active life allowing them to be employed productively for longer. Consequently, it received suggestions to increase the age limit for joining the NPS.
A subscriber joining the NPS after the age of 60 years will be eligible to continue in the system till the age of 70. Such subscribers will have the same investment choices as available to those joining before 60 years.
A NRI can open an NPS account. Contributions made by NRI are subject to regulatory requirements as prescribed by RBI and FEMA from time to time. If the subscriber's citizenship status changes, his/ her NPS account would be closed.
PFRDA has also made NPS available to all citizens of India, with effect from 1st May 2009 on a voluntary basis.
PFRDA is the regulator for the NPS. PFRDA is responsible for appointment of various intermediaries in the system such as Central Record Keeping Agency (CRA), Pension Fund Managers, Custodian, NPS Trustee Bank, etc.
The exit conditions for subscribers is: (i) if exit after three years of joining, then 40% of the amount will have to be annuitized (where amount is invested for fixed returns) and the remaining amount may be withdrawn lump sum, or (ii) if exit is before three years of joining, then 80% of the amount will have to be annuitized.
1. Which of the following statement related to PFRDA is correct?
a) It is a statutory body
b) It promotes old age income security by establishing, developing and regulating pension funds.
c) It administers the Atal Pension Yojana and National Pension System.
d) All of the above
Exp: The Pension Fund Regulatory and Development Authority (PFRDA) is the pension regulator of India which was established by Government of India on August 23, 2003 and was authorized by Ministry of Finance, Department of Financial Services. Upon introduction of the PFRDA Bill by the Government of India in the Parliament of India and the subsequent passage of the PFRDA Act in 2013, the Authority became a fully autonomous, regulatory and statutory body. PFRDA promotes old age income security by establishing, developing and regulating pension funds and protects the interests of subscribers to schemes of pension funds and related matters. Currently, PFRDA is regulating and administering the National Pension System (NPS) along with administering the Atal Pension Yojana (APY) which is a defined benefits pension scheme for the unorganized sector, guaranteed by the Government of India. PFRDA is responsible for appointment of various intermediate agencies such as Central Record Keeping Agency (CRA), Pension Fund Managers, Custodian, NPS Trustee Bank, etc.