National Pension System: You need to know about eligibility criteria for NPS investment – CNBC TV18

Launched by the Central Government in 2004, the National Pension System (NPS) has gained popularity over the years, especially among the private sector with limited retirement savings options. It was initially launched for government employees and later extended to all citizens in 2009. However, the benefit, eligibility and other factors along with investment rules are different for both government and private sector employees.

What is the national pension system?

The National Pension System is a central government -backed investment scheme designed to provide retirement benefits to its customers. Through the scheme, individuals can allocate funds in asset classes to suit their investment goals. There are two types of options including Tier 1 and Tier 2 accounts.

While Tier 1 pension accounts are mainly focused on savings for retirement, Tier 2 is a voluntary savings account.

As per the PFRDA Act 2013, the national pension system is regulated and managed by the Pension Fund Regulatory and Development Authority.

The scheme is open to all Indian citizens aged 18 to 70 years. After retirement, up to 60% corpus can be withdrawn as a lump sum amount, while the remaining 40% can be used to purchase annuity scheme. NPS investments also qualify for tax benefits.

eligibility criteria

• The applicant should be a citizen of India whether he is a resident, non -resident, or a foreign national (OCI) of India.
• NPS needs customers to provide valid documents for KYC compliance according to the customer registration form.
• People of Hindu undivided families and people of Indian origin are not eligible to subscribe to NP.
• The central government employees who join or after January 1, 2004 have been covered under the NPS scheme.
• Under the State Government adopting NP, employees are covered under the scheme.
• Similarly, it is extended to employees of autonomous bodies of the state who have adopted the system.
• According to the corporate model, private sector employees can also open an NPS account if their organization has adopted the plan.
• Institutions registered under the Companies Act 2013, Body established under any Act of Parliament, registered participation firm, limited liability participation, trust, society and international organizations (UN/WHO/WHO/World Bank/ADB/IMF), others The permission between is for the NPS scheme for your employees.