Objective of NPS
National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to enable subscribers to make informed decisions regarding their future through systematic savings during their working life. NPS promotes the habit of retirement savings and aims to provide adequate retirement income to every citizen of India.
Investment of Contributions
Under NPS, individual savings are pooled into a pension fund and invested by PFRDA-regulated professional fund managers according to approved investment guidelines. The investments are diversified across Government Bonds, Treasury Bills, Corporate Debentures and Equity Shares, enabling the pension corpus to grow over time based on market returns.
Benefits at Exit
At the time of normal exit from NPS, subscribers may utilize the accumulated pension wealth to purchase a life annuity from a PFRDA-empanelled Life Insurance Company. They may also withdraw a permissible portion of the accumulated pension corpus as a lump-sum amount, subject to the applicable rules.