- The Central Government has introduced the National Pension System (NPS) with effect from January 01, 2004 (except for armed forces).
- NPS is being implemented and regulated by Pension Fund Regulatory and Development Authority in the country.
- National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.
- NPS is structured into two tiers:
- Tier-I account: This is the non-withdrawable permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber.
- Tier-II account: This is a voluntary withdrawable account which is allowed only when there is an active Tier I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of the subscriber as and when claimed.
- NPS was made available to all Citizens of India from May 01, 2009.
- Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years (as on the date of submission of NPS application) can join NPS.
- However, OCI (Overseas Citizens of India) and PIO (Person of Indian Origin) card holders and Hindu Undivided Family (HUFs) are not eligible for opening of NPS account.
PFRDA
- The Pension Fund Regulatory & Development Authority Act was passed on 19th September, 2013.
- Its vision is to be a model regulator for promotion and development of an organized pension system to serve the old age income needs of people on a sustainable basis.
- Along with NPS, it also regulates other pension schemes subscribed by employees of public and private sector of India.