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.
- 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.