Pension Fund Regulatory and Development Authority
GS PAPER II: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Context: The Pension Fund Regulatory and Development Authority (PFRDA) announced crossing the milestone of Rs 6 lakh crore (Rs 6 trillion) of Assets Under Management (AUM) under the National Pension System (NPS) and Atal Pension Yojana (APY), after 13 years.
About PFRDA
- Pension Fund Regulatory and Development Authority (PFRDA) is the statutory authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of the National Pension System (NPS) and pension schemes to which this Act applies.
What is National Pension Scheme (NPS)?
- It is a social security initiative by the Central Government.
- This pension programme is open to employees from the public, private and even the unorganised sectors except those from the armed forces.
- It encourages people to invest in a pension account at regular intervals during the course of their employment.
- After retirement, the subscribers can take out a certain percentage of the corpus. As an NPS account holder, one will receive the remaining amount as a monthly pension post retirement.
- Earlier, the NPS scheme covered only the Central Government employees. Now, however, the PFRDA has made it open to all Indian citizens on a voluntary basis.
- NPS scheme holds immense value for anyone who works in the private sector and requires a regular pension after retirement.
- The scheme is portable across jobs and locations, with tax benefits under Section 80C and Section 80CCD.
Atal Pension Yojana
- It is a pension scheme mainly aimed at the unorganized sector such as maids, gardeners, delivery boys, etc.
- This scheme replaced the previous Swavalamban Yojana, which wasn’t accepted well by the people.
- Goal: To ensure that no Indian citizen has to worry about any illness, accidents or diseases in old age, giving a sense of security.
- Private sector employees or employees working with such an organization that does not provide them pension benefit can also apply for the scheme.
- There is an option of getting a fixed pension of Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000 on attaining an age of 60.
- The pension will be determined based on the individual’s age and the contribution amount.
- The contributor’s spouse can claim the pension upon the contributor’s death and upon the death of both the contributor and his/her spouse, the nominee will be given the accumulated corpus.
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