Question

With reference to staff benefits, explain the following:

National Pension System (NPS)

Answer 1

• The National Pension System (NPS) is a government-sponsored retirement savings scheme aimed at providing financial security to employees after retirement. It is a voluntary and contributory scheme where both the employee and the employer make regular contributions during the period of employment. These contributions are invested in various financial instruments such as equity, bonds, and government securities, which are managed by professional fund managers.
• On retirement, a portion of the accumulated amount can be withdrawn as a lump sum, and the remaining amount is used to purchase an annuity to receive a regular monthly pension. NPS is available to employees in both the public and private sectors, and it also offers tax benefits, making it a valuable component of staff welfare and retirement planning.

Answer 2

• National Pension System (NPS) is a government-sponsored pension scheme in India that helps individuals save for retirement.
• It is open to all Indian citizens between 18 and 70 years of age.
• Account holders can contribute money regularly to their NPS account while they are working.
• At the time of retirement, part of the amount can be withdrawn, and the rest is used to give a monthly pension.
• It offers tax benefits.
• It is governed by the PFRDA Act, 2013.