Question

UPSC Prelims 2017 Question:

Who among the following can join the National Pension System (NPS)?

1. Resident Indian citizens only
2. Persons of age from 21 to 55 only
3. All State Government employees joining the services after the state of notification by the respective State Governments
4. All Central Government employees including those of Armed Forces joining the services on or after 1st April, 2004

Answer (Detailed Solution Below)

Option 3: All State Government employees joining the services after the state of notification by the respective State Governments

Detailed Solution

Explanation:

National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers to make optimum decisions regarding their future through systematic savings during their working life. It seeks to inculcate the habit of saving for retirement amongst the citizens.

Eligibility:

The Central Government had introduced the National Pension System (NPS) with effect from January 01, 2004, except for the armed forces.
Any individual citizen of India (both resident and Non-resident) in the age group of 18-70 years (as on the date of submission of NPS application) can join NPS.
All Central Government employees joining on or after 01-01-2004 are mandatorily covered under NPS
All the employees of Central Autonomous Bodies who have joined on or after the above mentioned date are also mandatorily covered under NPS
All State Government employees joining the services after the state of notification by the respective State Governments

Therefore, option (3) is the correct answer.

Knowledge Box

National Pension Scheme (NPS)

Under NPS, individual savings are pooled in to a pension fund which are invested by Pension Fund Regulatory and Development Authority (PFRDA) regulated professional fund managers as per the approved investment guidelines in to the diversified portfolios comprising of Government Bonds, Bills, Corporate Debentures and Shares. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.
PFRDA has appointed Protean eGov Technologies Limited as Central Record keeping Agency (CRA) for the National Pension System.
- CRA is the first of its kind venture in India which will carry out the functions of Record Keeping, Administration and Customer Service for all subscribers under NPS. CRA shall issue a Permanent Retirement Account Number (PRAN) to each subscriber and maintain a database of each Permanent Retirement account along with recording transactions relating to each PRAN.

Subject: Economics | Economic Schemes and Policies

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