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The Pension Fund Regulatory and Development Authority (PFRDA) on Friday (May 1) introduced the New Pension Scheme (NPS) for all citizens of the country. Any citizen between the age of 18 and 55 can join the NPS. Tier-I of NPS constituting non-withdrawable pension account becomes operational from today and Tier-II (withdrawable account) of the NPS account will become operational in about six months.
A minimum annual contribution of Rs 6,000 in each subscriber account has been set by the PFRDA. The subscriber will have to have a minimum of four transactions of Rs 500 each in a year. Under the investment guidelines finalised for the NPS, pension fund managers will manage three separate schemes, each investing in a different asset class. The three asset classes are equity, government securities and credit risk-bearing fixed income instruments.
About 22 points of presence (PoP) and six pension fund managers have been appointed to offer the NPS to citizens. The Central Government employees who joined on or after January 1, 2004 are also covered under this scheme. Under this National Pension Scheme (NPS), money invested in the pension fund during the working life of the investor will come back partly as a lumpsum and partly as an annual payment or pension.
