Glossary
National Pension Scheme (NPS)
Meaning & Definition
The National Pension System (NPS) is a voluntary retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It allows employees to contribute regularly towards a pension fund during their working years and receive retirement benefits upon retirement. NPS is available to employees in both the public and private sectors.
Important Features of the National Pension System
- Helps employees build a financially secure retirement collection.
- Offers tax benefits on eligible employee and employer contributions.
- Encourages long-term savings through regular investments.
- Serves as an attractive employee retirement benefit.
- Enables employers to offer a structured retirement savings option to their workforce.
Applicable Rules & Regulations
The National Pension System (NPS) is governed by the Pension Fund Regulatory and Development Authority Act, 2013, and regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Note: For private sector employers, offering NPS is generally voluntary unless they have adopted the scheme as part of their employee benefits policy.
