National Pension Scheme (NPS)

NPS stands for National Pension Scheme of India. It is a contribution strategy developed by Central Government. The NPS is for the private, public, and unorganized sector employees. It motivates employees to save money while they are working by depositing a certain percentage of the amount and after retirement getting the benefits of the investment done.

Initially, when it was launched in the year 2004, it was eligible only for the employees who served Central Government, but later in the year 2009, it was opened for all sections except for armed forces. It is based on a unique Permanent Retirement Account Number (PRAN) which is allotted to each NPS subscriber upon joining the scheme.

NPS permits employees to contribute regularly to a pension account during their working life.  At retirement, they can withdraw a part of the saving in a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement. NPS carry the following major objectives:

• Income to old aged people
• Reasonable returns in the long run
• Economic security after retirement