National Pension Scheme

National Pension Scheme


  • According to a recent report, the penetration of NPS services differs across geographies.
  • The general opinion is that the adoption of NPS is lower because of a lack of financial knowledge amongst rural masses.

About the scheme:

  • ​National Pension System (NPS) is a voluntary retirement savings scheme laid out to allow the subscribers to make defined contribution towards planned savings thereby securing the future in the form of Pension.
  • It is an attempt towards a sustainable solution to the problem of providing adequate retirement income to every citizen of India.
  • PFRDA is the nodal agency for implementation and monitoring of NPS.

Who can open a NPS account?

A citizen of India, whether resident or non-resident, subject to the following conditions:

  • Applicant should be between 18 – 70 years of age as on the date of submission of his/her application and should comply with KYC norms prescribed.

Benefits of NPS Account

i) Low Cost:-

  • NPS is considered t​o be the world’s lowest cost pension scheme.
  • Administrative charges and fund management fee are also lowest.​

ii) Simple:-

  • All applicant has to do is to open an account with any one of the POPs being run through all Head Posts Offices across India and get a Permanent Retirement Account Number(PRAN).

iii) Flexible:-

  • Applicant can choose his/her own investment option and Pension Fund or select Auto choice to get better returns.

​iv) Portable:-

  • Applicant can operate an account from anywhere in the country and can pay contributions through any of the POP-SPs irrespective of the POP-SP branch with whom the applicant is registered, even if he/she changes his/her city, job etc and also make contributio​n through eNPS.
  • The accou​nt can be shifted to any other sector like Government Sector, Corporate Model in case the subscriber gets the employment.

Syllabus: Prelims