Question 73 from UPSC CSE 2017 - Current
Affairs

Question

Who among the following can join the National Pension System (NPS)?

IASCODEX · Accepted Answer

Correct Option: C. All State Government employees joining the services after the state of notification by the respective State Governments

Strategy: Eliminate options by identifying factually incorrect or overly restrictive statements.
- Option A is incorrect because NPS is available to NRIs, not exclusively to resident citizens.
- Option B is wrong as the age eligibility is 18–70 years, not the narrower 21–55 years.
- Option D is a misconception; armed forces personnel are excluded from the NPS for Central Government employees.
- Option C is correct as it accurately states that all new State Government employees are enrolled after their state's official notification.

Key Info: The National Pension System (NPS) is a contributory pension scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013.

**Eligibility and Enrollment**
- NPS is open to all Indian citizens (resident or non-resident) aged between 18 and 70 years, subject to KYC norms. NRIs can also join, subject to local regulations.
- The scheme is also available on a voluntary basis to private sector employees and the general public.

**Government Employees**
- All Central Government employees (except those in the Armed Forces) joining service on or after 1 April 2004 are mandatorily enrolled. The Armed Forces are excluded from NPS.
- For State Government employees, enrollment is mandatory for all new recruits after the respective state issues an official notification adopting the NPS. The effective date varies by state.

**Scheme Features**
- The scheme involves contributions from both the employer and the employee, with investments managed by PFRDA-appointed pension fund managers.
- Subscribers receive a Permanent Retirement Account Number (PRAN) and can choose from various investment options and fund managers.

**Withdrawal and Annuity**
- Upon superannuation, at least 40% of the accumulated pension corpus must be used to purchase an annuity. The remaining amount can be withdrawn as a lump sum.

**Objective**
- NPS is a key part of India's pension reforms, designed to replace the traditional defined-benefit system with a defined-contribution pension structure.

IASCODEX · Answer

Option A: Resident Indian citizens only

IASCODEX · Answer

Option B: Persons of age from 21 to 55 only

IASCODEX · Answer

Option D: All Central Government employees including those of Armed Forces joining the services on or after 1st April, 2004