The National Pension System (NPS) has
been designed giving utmost importance to the welfare of the subscribers
under NPS. There are a number of benefits available to the employees
under NPS. Some of the benefits are enlisted below:
•
NPS 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. 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.
• 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 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.
Some representations have been received
from certain quarters against the implementation of the NPS. The main
demand in these representations is that NPS may be scrapped and the
Government may revert to old defined benefit system. But the Government
does not propose to reimplement the old pension scheme by doing away
with NPS.
This was stated by Shri Jayant Sinha,
Minister of State in the Ministry of Finance in written reply to a
question in Lok Sabha today.
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