Government has announced that NPS would be available to every citizen from 1st April, 2009 on a voluntary basis. Accordingly, PFRDA is in the process of extending the NPS architecture so as to make it available to all citizens. The NPS architecture is transparent and will be web-enabled. It would allow a subscriber to monitor his/her investments and returns under NPS, the choice of Pension Fund Manager and the investment option would also rest with the subscriber. The design allows the subscriber to switch his/her investment options as well as pension funds. The facility for seamless portability and switch between PFMs is designed to enable subscribers to maintain a single pension account throughout their saving period.
PFRDA has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the PFMs. The NPS Trust is composed of members representing diverse fields and brings wide range of talent to the regulatory framework.
The New Pension System has been designed to enable the subscriber to make optimum decisions regarding his/her future and provide for his/her old-age through systemic savings from the day he/she starts his/her employment. It seeks to inculcate the habit of saving for retirement amongst the citizens.
PFRDA also intends to intensify its effort towards financial education and awareness as a part of its strategy to protect the interest of the subscribers. PFRDA’s efforts are an important milestone in the development of a sustainable and efficient voluntary defined contribution based pension system in India.
“Swavalamban Scheme**” of Govt of India, which grants an incentive of Rs 1000 to all eligible NPS accounts shall be available to all NPS Lite accounts as well, if they meet the prescribed criteria.
Distinguishing Features of NPS Lite:
Ø Focussed- For economically disadvantaged sections of the society and marginal investors
Ø Voluntary – Open to eligible* citizens of India, in the age group of 18–60 years. Subscriber is free to choose the amount he/she wants to invest every year.
Ø Simple – Eligible individuals in the unorganized work force can open an account through their Aggregator and get an Individual subscriber (NPS – Lite) Account.
Ø Safe – Regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.
Ø Economical – Ultra-low cost structure with no minimum amount required per annum or per contribution.
Ø Portable – Subscriber can operate account from anywhere in the country, even with change of location, employment or Aggregator.
*For eligibility and other conditions of NPS Lite, please refer to Regulations on NPS Lite and other information given below.
** Eligibility and other conditions for “Swavalamban Scheme” have been laid down in the Operating Guidelines of Swavalamban Scheme issued by Deptt. of Financial Services, Govt of India vide their letter no. 13/10/2006-PR dated 21st June 2010.
NPS Registration form
