Question

What is the ‘National Pension System’?

Answer 1

The National Pension System (NPS) is a government-sponsored retirement savings scheme in India aimed at providing financial stability to individuals after retirement. It is a voluntary scheme available to all Indian citizens between the ages of 18 and 70. Under NPS, subscribers make regular contributions during their working lives, which are invested in a mix of equity, government bonds, and corporate securities by professional fund managers. At the time of retirement, the accumulated amount can be partially withdrawn as a lump sum, while the remaining portion is used to purchase an annuity, which gives a monthly pension. The scheme offers tax benefits and is particularly helpful in building a long-term retirement corpus through disciplined savings.