{"id":30439,"date":"2026-09-28T18:10:38","date_gmt":"2026-09-28T12:40:38","guid":{"rendered":"https:\/\/vajiramandravi.com\/upsc-exam\/?p=30439"},"modified":"2026-09-28T18:10:38","modified_gmt":"2026-09-28T12:40:38","slug":"national-pension-system","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/upsc-exam\/national-pension-system\/","title":{"rendered":"National Pension System (NPS), Benefit, Models, Accounts"},"content":{"rendered":"<p><span style=\"font-weight: 400\">The National Pension System (NPS) is a contributory, defined-contribution pension framework designed to provide long-term retirement income security through regular savings and market-linked investments. Regulated by the Pension Fund Regulatory and Development Authority (PFRDA), NPS offers subscribers flexibility in choosing pension fund managers, investment options and asset allocation across equity, corporate bonds and government securities.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">Introduced for new Central Government employees in 2004, NPS has subsequently expanded to State Government employees, corporate employees and eligible citizens through different participation models. With Tier-I and Tier-II accounts, tax benefits and portability across employment, NPS has emerged as a key pillar of India\u2019s pension architecture. The significance of NPS has further increased with initiatives such as NPS Vatsalya and the Unified Pension Scheme.<\/span><\/p>\r\n<h2><span style=\"font-weight: 400\">National Pension System Overview<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The National Pension System is India's flagship pension framework that enables individuals to build a retirement corpus through regular contributions while offering flexibility in investment choices and broad coverage across sectors.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Evolution:<\/b><span style=\"font-weight: 400\"> NPS was introduced on 1 January 2004 for new Central Government employees (except the Armed Forces), replacing the <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/old-pension-scheme\/\" target=\"_blank\"><strong>Old Pension Scheme<\/strong><\/a> (OPS), and was later adopted by most State Governments for new entrants.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Objective: It is a<\/b><span style=\"font-weight: 400\"> contributory, defined-contribution pension scheme that aims to provide old-age income security through market-linked investments.\u00a0<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Regulator:<\/b><span style=\"font-weight: 400\"> Regulated and supervised by the Pension Fund Regulatory and Development Authority (PFRDA).<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Models: The National Pension System <\/b><span style=\"font-weight: 400\">operates through three models \u2013 Government Sector, Corporate Model, and All Citizen Model \u2013 covering government employees, private sector employees, and all eligible Indian citizens.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Eligibility: <\/b><span style=\"font-weight: 400\">Open to all eligible Indian citizens (residents, NRI, and OCI).\u00a0<\/span>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Subscribers can open Tier I (retirement account with withdrawal restrictions) and Tier II (voluntary savings account with greater liquidity) accounts.<\/span><\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400\"><b>Investment Framework:<\/b><span style=\"font-weight: 400\"> The National Pension System offers investment in equity, corporate bonds, government securities, and other approved asset classes, with the flexibility to choose fund managers and investment options under Active Choice or Auto Choice.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Government Contribution:<\/b><span style=\"font-weight: 400\"> For eligible Central Government employees, the Government contributes 14% of Basic Pay plus Dearness Allowance (DA) to the NPS account; however, the pension remains market-linked and is not guaranteed.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Scale (as of 31 March 2026): <\/b>The<span style=\"font-weight: 400\">\u00a0National Pension System has over 2.17 crore subscribers with Assets Under Management (AUM) of approximately \u20b915.95 lakh crore, making it India's largest pension savings framework.<\/span><\/li>\r\n<\/ul>\r\n<p><img decoding=\"async\" class=\"wp-image-30444 aligncenter\" src=\"https:\/\/vajiramias.sgp1.cdn.digitaloceanspaces.com\/wp\/upsc-exam\/2026\/09\/28133301\/NPS-1.png\" alt=\"NPS\" width=\"787\" height=\"571\" srcset=\"https:\/\/vajiramias.sgp1.cdn.digitaloceanspaces.com\/wp\/upsc-exam\/2026\/09\/28133301\/NPS-1.png 1472w, https:\/\/vajiramias.sgp1.cdn.digitaloceanspaces.com\/wp\/upsc-exam\/2026\/09\/28133301\/NPS-1-768x557.png 768w\" sizes=\"(max-width: 787px) 100vw, 787px\" \/><\/p>\r\n<h2><span style=\"font-weight: 400\">NPS Scheme Tax Benefit<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">Under the old tax regime, the National Pension System subscribers can claim an additional deduction of up to \u20b950,000 under Section 80CCD(1B), over and above the combined \u20b91.5 lakh limit under Sections 80C, 80CCC and 80CCD(1). Employer contributions to NPS under Section 80CCD(2) are separately deductible, subject to applicable limits.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Section 80CCD(1B):<\/b><span style=\"font-weight: 400\"> NPS subscribers can claim an additional deduction of up to \u20b950,000 per financial year, over and above the \u20b91.5 lakh combined limit under Sections 80C, 80CCC and 80CCD(1).<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Section 80CCE:<\/b><span style=\"font-weight: 400\"> The aggregate deduction under Sections 80C, 80CCC and 80CCD(1) is capped at \u20b91.5 lakh.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Employer Contribution \u2013 Section 80CCD(2):<\/b><span style=\"font-weight: 400\"> Employer contributions to the NPS Tier-I account are separately deductible, subject to prescribed limits. This deduction is available under both the old and new tax regimes.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Tier-I Account:<\/b><span style=\"font-weight: 400\"> NPS tax deductions under Sections 80CCD(1) and 80CCD(1B) relate to contributions to the pension account, subject to applicable conditions.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Tier-II Account:<\/b><span style=\"font-weight: 400\"> Ordinary Tier-II contributions do not qualify for tax deduction. However, the Tier-II Tax Saver Scheme (TTS) provides a Section 80C deduction to eligible Central Government NPS subscribers, subject to a three-year lock-in.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">National Pension System Models<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The National Pension System operates through three participation models to cater to government employees, private sector employees, and individual citizens.<\/span><\/p>\r\n<h3><span style=\"font-weight: 400\">Government Sector Model of NPS<\/span><\/h3>\r\n<p><span style=\"font-weight: 400\">It is designed for Central Government employees (except Armed Forces), employees of state governments that have adopted NPS, and employees of participating autonomous bodies.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Coverage: <\/b><span style=\"font-weight: 400\">NPS applies to all new Central Government employees joining on or after 1 January 2004 and has been adopted by most State Governments for their new recruits.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Nature:<\/b><span style=\"font-weight: 400\"> This model is a mandatory defined-contribution pension scheme for covered employees.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Contribution: <\/b><span style=\"font-weight: 400\">Both the employee and the government contribute to the employee's Permanent Retirement Account Number (PRAN). For eligible Central Government employees, the government contributes 14% of basic pay plus Dearness Allowance (DA).<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Fund Management: <\/b><span style=\"font-weight: 400\">The pension corpus is managed by Pension Fund Managers (PFMs) under the supervision of PFRDA through the CRA, Trustee Bank, Custodian, and NPS Trust.<\/span><\/li>\r\n<\/ul>\r\n<h3><span style=\"font-weight: 400\">Corporate Model of NPS<\/span><\/h3>\r\n<p><span style=\"font-weight: 400\">The Corporate Model extends the National Pension System benefits to employees of registered private and public sector organisations.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Coverage: It is <\/b><span style=\"font-weight: 400\">available to companies, LLPs, partnership firms, trusts, societies, public sector enterprises, government companies, and other eligible organisations registered with PFRDA.\u00a0<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Nature:<\/b><span style=\"font-weight: 400\"> A voluntary employer-sponsored retirement savings scheme.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Contribution:<\/b><span style=\"font-weight: 400\"> Contributions may be made by the employer, the employee, or both, in mutually agreed proportions.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Portability:<\/b><span style=\"font-weight: 400\"> The PRAN-based system allows seamless portability of the NPS account across different employers and sectors.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Benefits: <\/b><span style=\"font-weight: 400\">Offers market-linked returns, tax benefits under applicable provisions, online account access, and professional fund management by PFRDA-regulated intermediaries.\u00a0<\/span><\/li>\r\n<\/ul>\r\n<h3><span style=\"font-weight: 400\">All Citizen Model of NPS<\/span><\/h3>\r\n<p><span style=\"font-weight: 400\">The All Citizen Model enables any eligible Indian citizen to voluntarily save for retirement.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Coverage:<\/b><span style=\"font-weight: 400\"> It is open to resident Indians, NRIs, and Overseas Citizens of India (OCI) aged 18-85 years who satisfy KYC requirements and are legally competent to enter into a contract.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Nature: <\/b><span style=\"font-weight: 400\">It is a voluntary, individual pension scheme without any employer requirement.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Account Structure: The <\/b><span style=\"font-weight: 400\">subscribers can open a Tier I retirement account and an optional Tier II savings account.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Investment Flexibility: <\/b><span style=\"font-weight: 400\">Subscribers can choose their Pension Fund Manager, investment pattern, and asset allocation through Active Choice or Auto Choice.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Investment Options: <\/b><span style=\"font-weight: 400\">NPS contributions are invested across Equity (E), Corporate Bonds (C), and Government Securities (G) as per PFRDA-prescribed investment norms.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Portability: <\/b><span style=\"font-weight: 400\">The PRAN remains valid throughout the subscriber's lifetime regardless of changes in employment or place of residence.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">National Pension System (NPS): Tier-I and Tier-II Accounts\u00a0<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The National Pension System is structured into two types of accounts \u2013 Tier-I and Tier-II. Tier-I is the primary retirement\/pension account under NPS, while Tier-II is an optional savings account that provides greater flexibility in withdrawals.<\/span><\/p>\r\n<table style=\"width: 94.9892%\">\r\n<tbody>\r\n<tr>\r\n<td class=\"tb-color\" style=\"width: 37.1272%\"><b>Tier-I Account<\/b><\/td>\r\n<td class=\"tb-color\" style=\"width: 57.1228%\"><b>Tier-II Account<\/b><\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">It is the primary retirement (pension) account under the National Pension System.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">It is a voluntary and optional savings account under the National Pension System.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">It can be opened by all eligible National Pension System subscribers.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">It can be opened only with an active Tier-I account.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">It is designed to build a retirement corpus.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">It is meant for flexible savings and investments.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">Withdrawals are permitted only as per the NPS Exit and Withdrawal Rules.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">Withdrawals can be made at any time without restrictions. However, certain tax-benefit-linked Tier-II variants can have specific conditions.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">Minimum initial contribution: \u20b9500.<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">Minimum subsequent contribution: \u20b9500 per transaction.<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">Minimum annual contribution: \u20b91,000 per financial year.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">Minimum initial contribution: \u20b91000.<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">Minimum subsequent contribution: \u20b9250 per transaction.<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">There is no minimum annual contribution requirement for the Tier II account, provided your Tier I account is active.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">Annual Maintenance Charges (AMC) are applicable.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">No separate Annual Maintenance Charges (AMC) are applicable.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 37.1272%\">\r\n<p><span style=\"font-weight: 400\">Contributions are invested in the chosen pension fund and scheme.<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 57.1228%\">\r\n<p><span style=\"font-weight: 400\">Funds can be transferred to the Tier-I account at any time.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h2><span style=\"font-weight: 400\">National Pension System Vatsalya<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">NPS Vatsalya, launched in 2024, is a contributory pension scheme under the National Pension System that enables parents or legal guardians to start pension savings for minors from an early age.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The minor remains the sole subscriber and beneficiary of the pension account.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The parent or legal guardian manages the account until the minor turns 18.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">On attaining 18 years, the subscriber may continue in NPS Vatsalya up to 21 years, shift the accumulated corpus to NPS, or exit, subject to applicable rules.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The scheme promotes early retirement planning by allowing long-term, market-linked wealth creation through the National Pension System framework.<\/span><\/li>\r\n<\/ul>\r\n<h3><span style=\"font-weight: 400\">Unified Pension Scheme<\/span><\/h3>\r\n<p><span style=\"font-weight: 400\">The Unified Pension Scheme (UPS) came into effect on 1 April 2025 as an optional pension scheme under the National Pension System for eligible Central Government employees.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>UPS <\/b><span style=\"font-weight: 400\">follows a contributory model, with contributions from both the employee and the Central Government.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">UPS provides an assured, inflation-indexed pension, unlike the NPS, where retirement benefits depend on the accumulated corpus and market returns.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Employees with at least 10 years of qualifying service are eligible for a minimum assured pension of \u20b910,000 per month, subject to the prescribed conditions.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The pension is linked to the employee's qualifying service and last drawn Basic Pay and Dearness Allowance (DA), and Dearness Relief (DR) is payable to protect against inflation.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">In the event of the employee's death after retirement, the legally wedded spouse is entitled to a family pension equal to 60% of the admissible pension.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The scheme is regulated by the <\/span><span style=\"font-weight: 400\">Pension Fund Regulatory and Development Authority<\/span><span style=\"font-weight: 400\"> (PFRDA).<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">NPS vs PPF<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The National Pension System is a market-linked, retirement-focused savings vehicle whose returns depend on the performance of pension fund managers and financial markets.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">In contrast, the Public Provident Fund (PPF) is a government-backed savings scheme offering interest at rates notified quarterly by the government.\u00a0<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">While PPF serves broader long-term savings goals, NPS is specifically designed for retirement planning.<\/span><\/li>\r\n<\/ul>\r\n<table style=\"width: 96.494%\">\r\n<tbody>\r\n<tr>\r\n<td class=\"tb-color\" style=\"width: 14.9663%\"><b>Aspect<\/b><\/td>\r\n<td class=\"tb-color\" style=\"width: 47.5793%\"><b>NPS<\/b><\/td>\r\n<td class=\"tb-color\" style=\"width: 33.1358%\"><b>PPF<\/b><\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 14.9663%\">\r\n<p><b>Maturity\/Exit<\/b><\/p>\r\n<\/td>\r\n<td style=\"width: 47.5793%\">\r\n<p><span style=\"font-weight: 400\">Exit generally at 60 years\/superannuation; continuation possible up to 75 years<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 33.1358%\">\r\n<p><span style=\"font-weight: 400\">Matures after 15 years<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 14.9663%\">\r\n<p><b>Returns\/ Interest<\/b><\/p>\r\n<\/td>\r\n<td style=\"width: 47.5793%\">\r\n<p><span style=\"font-weight: 400\">Market-linked returns; no fixed interest rate<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 33.1358%\">\r\n<p><span style=\"font-weight: 400\">Government-notified interest rate: 7.10% per annum for July to September 2026.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 14.9663%\">\r\n<p><b>Minimum Investment<\/b><\/p>\r\n<\/td>\r\n<td style=\"width: 47.5793%\">\r\n<p><span style=\"font-weight: 400\">\u20b9500 per contribution; minimum \u20b91,000 annually<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 33.1358%\">\r\n<p><span style=\"font-weight: 400\">\u20b9500 annually; maximum \u20b91.5 lakh annually<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 14.9663%\">\r\n<p><b>Tax Benefits<\/b><\/p>\r\n<\/td>\r\n<td style=\"width: 47.5793%\">\r\n<p><span style=\"font-weight: 400\">Deduction under Section 80CCD, including an additional \u20b950,000 under 80CCD(1B), subject to conditions<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 33.1358%\">\r\n<p><span style=\"font-weight: 400\">Deposit eligible for the Section 80C deduction; interest is tax-exempt.<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 14.9663%\">\r\n<p><b>Withdrawal<\/b><\/p>\r\n<\/td>\r\n<td style=\"width: 47.5793%\">\r\n<p><span style=\"font-weight: 400\">Withdrawal\/exit subject to PFRDA rules; premature exit generally involves 20% lump sum and 80% annuitisation, subject to conditions<\/span><\/p>\r\n<\/td>\r\n<td style=\"width: 33.1358%\">\r\n<p><span style=\"font-weight: 400\">Partial withdrawal permitted from the 7th financial year, subject to conditions<\/span><\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h2><span style=\"font-weight: 400\">National Pension System Significance<\/span><\/h2>\r\n<p><span style=\"font-weight: 400\">The National Pension System is a voluntary, defined-contribution pension scheme regulated by PFRDA that aims to provide retirement income security through long-term savings. It has emerged as a key pillar of India's pension architecture by promoting fiscal sustainability, financial inclusion, and capital market development.<\/span><\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400\"><b>Ensures Fiscal Sustainability: <\/b><span style=\"font-weight: 400\">NPS shifts pension financing from an unfunded defined-benefit Old Pension Scheme toward a funded defined-contribution framework, thereby improving predictability of government pension liabilities.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Expands Pension Coverage:<\/b><span style=\"font-weight: 400\"> NPS covered 2.17 crore subscribers as of 31 March 2026, including government employees, corporate employees, and voluntary subscribers.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Mobilises Long-term Capital:<\/b><span style=\"font-weight: 400\"> NPS had Assets Under Management (AUM) of \u20b915.95 lakh crore (31 March 2026), channelising long-term household savings into government securities, corporate bonds, and equities.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Provides Portability and Flexibility:<\/b><span style=\"font-weight: 400\"> The PRAN-based structure enables seamless portability across jobs and sectors, with flexibility in choosing pension fund managers and asset allocation.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Promotes <\/b><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/financial-inclusion\/\" target=\"_blank\"><b>Financial Inclusion<\/b><\/a><b>: <\/b><span style=\"font-weight: 400\">Through the All Citizen Model and complementary schemes such as Atal Pension Yojana (APY), the NPS pension architecture expands coverage among informal-sector and low-income workers.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Strengthens Retirement Security:<\/b><span style=\"font-weight: 400\"> Initiatives such as NPS Vatsalya and market-linked investment options encourage lifecycle savings and improve retirement preparedness.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Provides a Robust Institutional Framework: <\/b><span style=\"font-weight: 400\">NPS is regulated by PFRDA, ensuring transparent governance, prudent investment management, and investor protection.<\/span><\/li>\r\n\t<li style=\"font-weight: 400\"><b>Serves as the Foundation for Pension Reforms:<\/b><span style=\"font-weight: 400\"> NPS forms the basis of the Unified Pension Scheme (UPS), reflecting its role as India's core pension architecture.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400\">National Pension System UPSC PYQs<\/span><\/h2>\r\n<p><b>Q1.<\/b><span style=\"font-weight: 400\"> Who among the following can join the National Pension System (NPS)? <\/span><b>(Prelims 2017)\u00a0<\/b><\/p>\r\n<p><span style=\"font-weight: 400\">(a) Resident Indian citizens only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">(b) Persons of age from 21 to 55 only<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">(c) All State Government employees joining the services after the date of notification by the respective State Governments<\/span><\/p>\r\n<p><span style=\"font-weight: 400\">(d) All Central Government employees, including those of the Armed Forces joining the services on or after 1st April, 2004<\/span><\/p>\r\n<p><b>Ans: (c)\u00a0<\/b><\/p>","protected":false},"excerpt":{"rendered":"<p>The National Pension System, or NPS, is a voluntary, contributory, and defined-contribution pension scheme to provide financial security during old age. Learn about its models and types of accounts.<\/p>\n","protected":false},"author":35,"featured_media":30464,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[38,30],"tags":[2079,40,1033],"class_list":["post-30439","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-notes","category-upsc-economy-notes","tag-nps","tag-quest","tag-upsc-economy-notes"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/30439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/comments?post=30439"}],"version-history":[{"count":3,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/30439\/revisions"}],"predecessor-version":[{"id":30469,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/posts\/30439\/revisions\/30469"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media\/30464"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/media?parent=30439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/categories?post=30439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/upsc-exam\/wp-json\/wp\/v2\/tags?post=30439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}