Edit Content Pension for All: Retiring with Dignity

Description

Pension is an essential mechanism that helps in leading a financially stable life after retirement or at an age when an individual is often retires from his vocation. With rapid economic progress, the cost of living has increased manifold thereby making pension schemes a must for every individual.

However, pension schemes are not only linked to retirement. With the increase in life expectancy, people live longer than a few decades back due to tremendous advancement in healthcare. Therefore, an individual will need funds to cover his daily expenses, medical needs and other contingency expenses to lead a comfortable and longer life.

Another huge reason that makes pension unavoidable is to cover post retirement expenses, like an independent lifestyle, social security or education of children, etc. None of these are negotiable nowadays.

In order to cope with such a financial necessity, the Union Government has launched various pension schemes for the citizens. Prominent among them are Atal Pension Yojana (APY), National Pension System (NPS) and National Pension System-Lite(NPS-Lite). 
Atal Pension Yojana: Pension Cover for All 
Atal Pension Yojana (APY) is a pension scheme targeting the unorganised sector. The scheme was launched by Prime Minister Narendra Modi on May 9, 2015 in Kolkata. As of May 2015, only a meagre 11 per cent of the country’s population was covered under any kind of pension scheme.

In APY, for every contribution made to the pension fund, the Union Government would also co-contribute 50 per cent of the total contribution or Rs 1,000 per annum (whichever is lower), to each eligible subscriber account, for a period of 5 years. The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

This scheme has been linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana and the contributions will be deducted automatically. Most of these accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes.

Salient Features:

<ul>
	<li>The Government of India is concerned about the old age income security of the working poor and is focused on encouraging and enabling them to save for their retirement.</li>
	<li>To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement.</li>
	<li>The Union Government announced APY during the 2015-16 budget.</li>
	<li>The APY is focussed on all citizens in the unorganised sector.</li>
	<li>The scheme is administered by the Pension Fund Regulatory and Development Authority (PFRDA) through NPS architecture.</li>
</ul>

National Pension System:

Pension Cover for All Citizens 
The Union Government has introduced the National Pension System (NPS) with effect from January 01, 2004 (except for armed forces). NPS was made available to All Citizens of India from May 01, 2009. Pension Fund Regulatory and Development Authority (PFRDA), the regulatory body for NPS, has appointed NSDL as Central Recordkeeping Agency (CRA) for 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 data base of each permanent retirement account along with recording transactions relating to each PRAN.

National Pension System (NPS), Regulated by PFRDA, is an important milestone in the development of a sustainable and efficient voluntary defined contribution pension system in India. It has the following broad objectives:

<ul>
	<li>Provide old age income</li>
	<li>Reasonable market based returns over the long term</li>
	<li>Extending old age security coverage to all citizens</li>
</ul>

NPS-Lite: Pension for Unorganised Sector

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the National Pension System-Lite (NPS-Lite) with effect from April 01, 2010. PFRDA has appointed NSDL e-Governance Infrastructure Limited as Central Recordkeeping Agency (CRA) for NPS - Lite. 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 - Lite.

The NPS-Lite is basically designed with the intention to secure the future of the people who are economically disadvantaged and who are not financially well to do. Towards this endeavor NSDL has developed a NPS Lite system on a low charge structure.

The servicing model is of NPS Lite is based on group servicing. The people forming part of this low income groups will be represented through their organizations known as 'aggregators' who would facilitate in subscriber registration, transfer of pension contributions and subscriber maintenance functions. Subscribers in the age group of 18 to 60 can join NPS - Lite through the aggregator and contribute till the age of 60.

<ul>
	<li>Entities registered under Companies Act.</li>
	<li>Entities registered under various Co-operative Acts</li>
	<li>Central Public Sector Enterprises</li>
	<li>State Public Sector Enterprises</li>
	<li>Registered Partnership firm</li>
	<li>Registered Limited Liability Partnership (LLPs)</li>
	<li>Anybody incorporated under any act of Parliament or State legislature or by order of Central / State Government</li>
	<li>Proprietorship Concern</li>
	<li>Trust/Society</li>
</ul>

Pension Schemes for the Corporate Sector: The Union Government has introduced the National Pension System (NPS) with effect from January 1, 2004 (except for armed forces). Pension Fund Regulatory and Development Authority (PFRDA), the regulatory body for NPS, has appointed NSDL as Central Recordkeeping Agency (CRA) for 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 data base of each Permanent Retirement account along with recording transactions relating to each PRAN.

NPS Corporate Sector Model is the customized version of core NPS to suit various organisations and their employees to adopt NPS as an organized entity within purview of their employer-employee relationship. This would facilitate corporate entities and other registered bodies to move their existing and prospective employees to NPS architecture. This is in an additional avenue for retirement planning being made available to the organised sector and does not dilute their responsibilities under other statutory provisions like provident fund etc. Corporate sector has been formally launched from December 2011. Corporate may join NPS through any one of the existing Point of Presence (POP).

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