National Pension System is a government-sponsored retirement savings option where individuals can contribute a monthly amount to draw regular income after retirement.
Total pension assets under management as on March 4, 2023 was Rs 8.82 lakh crore, showing a YoY growth of 23.45 per cent.
The number of subscribers under various schemes of the National Pension System (NPS) grew by 22.88 per cent year-on-year to 6.25 crore as of March 4 this year, as against 5.08 crore a year ago. The total pension assets under management (AUM) stood at Rs 8.82 lakh crore as on March 4, 2023, showing a YoY growth of 23.45 per cent.
Under NPS, the central government scheme saw a 4.8 per cent increase in subscribers between March 4, 2023 and March 5, 2022, state government accounts saw a 9.39 per cent increase, corporate (20.19 per cent), all-citizen model (32.02 per cent), and Atal Pension Yojana (28.46 per cent), according to the latest data from the finance ministry.
What is NPS?
NPS, or National Pension System, is a government-sponsored retirement savings option where individuals can contribute a monthly amount to generate regular income after retirement. It was started in January 2004 for government employees. Later in 2009 it was opened for all classes. NPS is a pension-cum-investment scheme launched by the government to provide old age security to the citizens of India. It brings an attractive long term savings opportunity to plan your retirement effectively through safe and regulated market-based returns.
Types of NPS Accounts
Under NPS, there are two types of accounts – Tier 1 and Tier 2. Tier 1 account is primarily meant for retirement savings where a minimum contribution of Rs 500 is required at the time of opening the account. It also provides tax benefits under section 80CCD(1B) of the Income Tax Act, 1961.
NPS Tier 2 is an open-access account. It requires a minimum investment of Rs 1,000, where the customer is free to withdraw their entire funds at any point of time. No tax benefits are available in this account.
Various Schemes under NPS
There are four asset classes under NPS – Equity (E), Corporate Debt (C), Government Bonds (G) and Alternative Investment (Scheme A). There are two levels of schemes under each category. In NPS, there are multiple pension fund managers and investment options. The client first selects the Fund Manager, and then has the option to choose any one of the investment options.
What is NPS Rating System?
The rating system will help the subscribers to have a better idea of the risk involved in their investment under NPS. They will be able to take better decisions on allocation of investments in various asset class schemes at the time of enrollment in the scheme and subsequently while contributing to the schemes.
The rules mandate six levels of risk – low risk, low to medium risk, medium risk, medium high risk, high risk and very high risk. Based on the characteristics of the scheme, the Pension Fund will decide the risk level for E-Tier 1, E-Tier 2, C-Tier 1, C-Tier-2, G-Tier-1, G-Tier-2 and Scheme A . , as per the circular.
new rules of nps from april 1
PFRDA has asked the customers and concerned Nodal Officers/POPs/Corporate to ensure that the documents are uploaded on the respective Central Record Keeping Agency (CRA) user interface. They must also ensure that the documents uploaded are legible. The documents are NPS exit/withdrawal form, proof of identity and address specified in the withdrawal form, bank account proof and copy of PAN card.
The move is aimed at making the annuity payment faster and simpler after exiting the NPS.
read all latest business news Here
