On exit/retirement/superannuation, a minimum of 40% of the corpus is mandatorily utilized to procure a pension for life by purchasing an annuity from a life insurance company and the balance corpus is paid as lumpsum. The contributions accumulate over a period of time till retirement grows with market linked returns. It is allowed only when there is an active Tier-I account in the name of the subscriber. Tier-II is a voluntary account which offers liquidity of investments and withdrawals. Tier-I account is the pension account having restricted withdrawals. NPS offers two types of accounts, namely Tier-I and Tier-II. Under NPS, a unique Permanent Retirement Account Number (PRAN) is generated and maintained by the Central Recordkeeping Agency (CRA) for individual subscriber. NPS is a market linked, defined contribution product. The National Pension System (NPS) is being administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) set up under PFRDA Act, 2013.
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