Pension Fund Regulatory and Development Authority (PFRDA), Government of India has announced a new Pension scheme for post-retirement life.
New Pension scheme When it will come in effect?
The scheme which came to effect from May 1, 2009 allows investors to choose their asset allocation as well as their fund managers.
Citizens of India will now have an option of securing their post-retirement life with the New Pension Scheme established by the Government under the Pension Fund Regulatory and Development Authority (PFRDA).
The scheme has come in to effect from May 1, 2009. The unique feature of the scheme is the flexibility offered for investors to choose their asset allocation as well as their fund managers.
This scheme has already been made mandatory for Central Government employees from 2004 and is said to have earned a weighted average return of about 14.5 per cent (according to PFRDA) over the last one year. Reports Hindu.
Check out how New pension Scheme Works.
Two types of accounts are available under the NPS.
Tier-I account: Individuals can contribute their savings for retirement into this non-withdrawal account.
Tier II account: Under this saving facility, individuals are free to withdraw their savings whenever they require.
Tier I account is available for contribution from May 1, 2009. The commencement of the Tier II account will be notified shortly by PFRDA.
Who can be member?
A citizen of India, whether resident or non resident aged between 18-55 years on the date of submission of the application can open this account.. Investors can open these accounts in 22 entities prescribed by PFRDA. These include LIC, State Bank of India, ICICI Bank and UTI Asset Management.
Who are not eligible for New Pension Scheme 2009?
Individual who are not granted an order of discharge by a court (un-discharged insolvent), individuals of unsound mind and pre-existing account holders under NPS.
Minimum contribution per instalment is Rs 500 and minimum contribution per year is Rs 6000. There should be a minimum of 4 contributions made each year. Over and above the mandated limit of a minimum of four contributions, account holders can decide on the frequency and extent of the contribution across the year as per their convenience.
