‘Mindset to blame for poor response to NPS’

News:According to the Pension Fund Regulatory and Development Authority (PFRDA),National Pension System (NPS) is a less-preferred saving option due to a certain mindset of individuals and corporates.


  • The PFRDA has said that there are around 7,000 corporates companies registered with PFRDA.However, only 2-4% of employees of these registered companies are covered under NPS.
  • Further,the pension system also cover small number of individuals and corporates while a large population of small, medium, and micro enterprises and start-ups are yet to be part of the pension market.
  • Hence,the central government is considering to double tax benefits to ₹1 lakh from ₹50,000.It may also allow PFRDA to become a single regulator for all pension products to give the entity more validity and standing in the country’s under tapped pension market.

About National Pension System(NPS):

  • National Pension System (NPS) is a government-sponsored pension scheme.It was launched in January 2004 for government employees.However,in 2009,it was opened to all sections.
  • Objective:The scheme allows subscribers to contribute regularly in a pension account during their working life. 
  • Upon retirement,subscribers can withdraw a part of the corpus in a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement.
  • Implementation:NPS is being implemented and regulated by Pension Fund Regulatory and Development Authority in the country.
  • National Pension System Trust(NPST) established by PFRDA is the registered owner of all assets under NPS.
  • Eligibility:Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can join NPS.
  • Recently,PFRDA has permitted Overseas Citizen of India(OCI) to enroll in the NPS at par with Non-Resident Indians.

Additional information:

About PFRDA:

  • PFRDA is a statutory body established under the Pension Fund Regulatory Development Authority(PFRDA) Act,2013.
  • Its objective is to be a model regulator for promotion and development of an organized pension system to serve the old age income needs of people on a sustainable basis.
  • It develops, promotes and regulates the pension industry under National Pension System and also administers the Atal Pension Yojana.