National Pension Scheme And Its Impact On Employees Under NPS

The National Pension System (NPS) has been designed giving utmost importance to the welfare of the subscribers under NPS.

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.

There are a number of benefits available to the employees under NPS. Some of the benefits are enlisted below:

• NPS well designed

It 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.

• Dual benefit

There is a dual benefit of low cost and power of compounding - The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest 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

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.

Source: PIB