National Pension System (NPS)

NPS (National Pension System) is a defined contribution based Pension Scheme launched by Government of India with the following objectives

  • To provide old age income
  • Reasonable market based returns over long run
  • Extending old age security coverage to all citizens

It is based on a unique Permanent Retirement Account Number (PRAN) which is allotted to each Subscriber upon joining NPS.

The Government of India in exercise of their executive powers adopted 'National Pension System' (NPS) based on defined contributions in respect of all new entrants to Central Government services, excepting the Armed Forces, with effect from 1st January 2004. Most of the State Governments have since notified a similar pension system for their new entrants. NPS accumulates savings into subscribers PRA while he is working and use the accumulations at retirement to procure a pension for the rest of his life.

PFRDA has also made NPS available to all citizens of India, with effect from 1st May 2009 on a voluntary basis. In pursuance to PFRDA's commitment to make available an avenue for saving for old age to all sections of society, PFRDA has now launched a separate model to provide NPS to the employees of corporate entities, including PSUs since December 2011. This model is titled "NPS - Corporate Sector Model".

pension scheme