The National Pension System
(NPS) has been designed giving utmost importance to the welfare of the
subscribers under NPS. There are a number of benefits available to the employees under NPS.
Some of the benefits are enlisted below:
• NPS is a well designed
pension system managed through an unbundled architecture involving intermediaries appointed by the Pension
Fund Regulatory and Development Authority (PFRDA) viz, pension funds,
custodian, central record keeping and accounting agency, National Pension
System Trust, trustee bank, points of presence and annuity service providers.
It is prudently regulated by PFRDA which is a statutory regulatory body
established to promote old age income
security and to protect the interests of subscribers of NPS.
• Dual benefit of low cost
and power of compounding – The pension wealth which accumulates over a period
of time tillretirement grows
with a compounding effect. The all-in-costs of the institutional architecture
of NPS are among thelowest in the
world.
• Tax Benefits – The tax
benefits are available to the NPS subscribers under the provisions of the Income-tax Act,
1961. These were further increased in the Finance Bill, 2015.
• Transparency and
Portability is ensured through online access on
the pension account by the
NPS subscribers, across all geographical locations and portability of employments.
• Partial withdrawal – subscribers can withdraw
upto 25% of their own contributions before attaining superannuation age,
subject to certain conditions.
Some representations have
been received from certain quarters against the implementation of the NPS. The
main demand in these representations is that NPS may be scrapped and the
Government may revert to old defined benefit system.
But the Government does not propose to reimplement the old pension scheme by
doing away with NPS.
This was stated by Shri
Jayant Sinha, Minister of State in the Ministry of Finance in written reply to
a question in
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