NPS (National Pension Scheme) – Swavalamban Pension Yojana (FAQ typically associated with the swavalamban scheme)
What is the pension and why do I need this?
The pension provides monthly income to anyone that, when he is not in employment or not earning curve so that the pensions are required. Fixed monthly income of a person normally dignified life in old age.
- Does not earn income in old age than youth or become unproductive.
- Growing trend of single families, migration of youth members for earnings.
- Increasing in living expenses.
- Increase in life expectancy.
NPS – What is Swavalamban Scheme and why it is right pension option for me?
The swavalamban yojana is the plan of central government. The government will contribute one thousand rupees monthly bases on the swavalamban accounts opened in the 2010 – 2011 and 2012 – 2013 years by the government under the swavalamban scheme.
- Accounts opened in the 2010 – 11 will be benefited till 2014 – 15.
- Accounts opened in the 2011 – 12 will be benefited till 2015 – 16.
- Accounts opened in the 2012 – 13 will be benefited till 2016 – 17.
The accounts opened during the year from 2013 – 2014 to 2016 – 2017 would benefit till 2016 – 2017.
Highlights of NPS – Swavalamban Yojana:
@= Voluntary – The scheme is entirely voluntary and that every citizen of 18 to 60 years of age are eligible. Each person may submit any amount per year at his or her convenience.
@= Simple – This plan is very simple and unorganized eligible person opening an account through your employer may take account of individual NPS swavalamban scheme.
@= Safe – This plan is organized by the Pension Fund Regulatory Development Authority through the transparent investment standards, regular monitoring and review of fund managers of NPS Trust, which is governed by the central government of India.
@= Economically Justified – In this a very low minimum deposit amount required and there is not no such condition to deposit minimum amount in a year.
Why such a long period in the pension scheme should invest?
The contributions in the NPS – Swavalamban Plan will help you and to your family to get the fixed monthly income in the future. You can contribute a part of your income in this scheme of central government. If you are not in the employment of the long term the savings of this pension plan will helps you to get the regular income.
How NPS Swavalamban Scheme is Different from other Pensions Schemes?
It is a pension plan in which monthly income after retirement is ensured. Under the NPS (National Pension Scheme) swavalamban plan, a part of contribution is invested in the equity (stock market) and that’s why banks and financial institutions are more likely than the returns. Market-based investment schemes other than the risk of drowning in the capital remains low and it is therefore quite low because 55 per cent of the funds invested in government securities and corporate bonds is 40 per cent of funds.
Contribution of NPS Swavalamban invests in the Equity Market. How safe is it?
This investment operates by the Pension Fund Regulatory Development Authority (PFRDA) Government of India. The authority invests 15 percent of the total NPS swavalamban amount in the equity or stock market. Rest of the money invested in the fixed income instruments such as corporate bonds and government securities balance.
In comparison of PPF, Fixed Deposits and other investments plans how to find the information of return of NPS swavalamban scheme?
The PPF investments and fixed deposits have the maturity duration with the fixed interest rate. Hence, long-term assessment of this information is possible. The NPS swavalamban contributions are based on the market return and it’s a flexible investment, which is also based on the market conditions of changes.
Who can take NPS Swavalamban Plan?
Every citizen of India, which is connected to the unorganized sector by following this plan, can take advantage:
- When submitting your application form must be having the age from 18 years to 60 years
- By the employer to its employees should comply with the standards process by the banks in “KYC know your customer”
- The plan to adopt any other interested person Employees Provident Fund and Miscellaneous Provisions Act, such as social security scheme, the Coal Mines Provident Fund and Miscellaneous Provisions Act should not be included.
What is the Procedure to Open an Account under NPS Swavalamban?
- Employer contact
- Registration Form Filling
- Providing KYC documents to verify identity and address proof
- The minimum contribution of Rs. 100 at the time of registration
- Take the Permanent Retirement Account Number (PRAN) from employers
Once registered in the NPS Swavalamban Plan How to contribute regularly?
At the time of registration and after that you can contribute your amount in the swavalamban through the registered person. You must contribute in the plan under following conditions:
Ø The minimum contribution should be made for Rs. 100 at the time of registration.
Ø To get the benefits of swavalamban scheme, however there is no any minimum amount of contribution fixed but the account holders are suggested to contribute for Rs. 1000 (one thousand rupees) per year.
Ø It should keep in mind that more and more you will contribute to the swavalamban plan will get more pension funds. Any account holder can contribute up to maximum of Rs. 12000 (twelve thousand rupees) per year to this scheme.
How much money should be deposited to the NPS swavalamban plan? What is the provision of minimum contribution for per year?
At the time of registration, you will have to deposit Rs. 100. However there is no minimum amount set for the annual contributions, so at the time of retirement to get good amount as the pension the account holders are suggested to minimum deposit of Rs. 1000 (one thousand rupees) per month.
How many times you can deposit money in this scheme?
For the contribution annually there is no any minimum or maximum limit is set. For the frequency and contribution of amount to fund the customers are free.
Where will department invest these money?
Based on guidelines set by the Ministry of Finance, Government of India the funds received under the NPS swavalamban scheme will be invested to the corporate bonds and government security.
At what rate will increase in the amount of contribution?
An increase on the investment is not guaranteed. The increment in the NPS swavalamban scheme is based on the market. It benefits from the full amount of the contribution and investment growths are dependent on the time of the exodus from NPS.
When will allow your account issue?
Normally at the age of 60 the NPS swavalamban amount will be issued. However apart from this account holders also can release their money on the special circumstances. Details of the extraction process is as follows:
ð Withdrawals at the age of 60: Total deposits to the customers (pension) will invest at least 40 percent, so that they can purchase equity. The customer bank account details and the evacuation of an authorized person shall provide, for the implementation of CRA system information to be uploaded. At the time of the withdrawal Rs. 1000 (one thousand rupees) monthly pension is being attempted. If the pension of Rs. 1000 to 40 percent of the corpus is not enough, then you will be in accordance with the percentage or the entire pension funds will be given as per the annuitization.
ð Withdrawal before the age of 60: Total deposits for the purchase of equity, customers (pension funds) will invest at least 80 percent. The remaining 20 percent of the customer can withdraw the funds.
ð Withdrawals at customer’s death: all payments in the event of the death of the customer would be transferred to nominee / legal heir. The nominee / legal heir person will contact to the authorized person with the death certificate, identity documents as such proofs.
How will you know about the status of investments?
An annual statement will be sent about the transaction, including details of deposits and individual retirement account included in the corpus of the current value. However through the help of authorized person you can check the status of your account any time.
Upon the death of the customer how the nominee will receive the funds?
ð First option: Nominee can receive sump sum 100 percent of pension funds of NPS swavalamban. In this case contact to the authorized person and submit the necessary documents as proof identity and death certificate.
ð Second option: If the designated person wants to continue to NPS and NPS personally set before the client will be made to complete the KYC norms.
While not required for subscribe to any bank account details, but what will happen when the time of issuance of bank accounts will be made available by detailing the customers?
Although at the time of registration in NPS swavalamban it is not mandatory to enter the bank account, but it is important to be considered. Issuance of bank account is necessary because the extraction time cash transactions of any kind are not allowed. It is in the interest of customers.
In case of changing the address / house the scheme will valid? So how we can deposit funds?
At the time of changing the address / house / town the customers should keep their own permanent retirement account number (PRAN) This number will be valid throughout the country, the locally authorized person involved in the operation to continue through investment.
During that time the old age pension scheme is financial security and stability, when people have no regular source of income. Retirement planning is ensured by the prestigious life of the people and their growing years of age, without any compromise in the quality of life of having to be good. Pension plan investments and people who get the opportunity to accumulate their retirement savings when the annual plan as a regular income to give him as a lump sum. According to the UN Population Division, life expectancy in India has increased from the current 65 years to 75 years by 2050 is expected to reach. Better health and hygiene conditions in the country have increased the lifespan. As a result, the number of years after retirement has also increased. Thus the rising cost of living, inflation and life expectancy of the retirement plan is an essential part of today's life. More and more citizens to provide social security to the Government of India have launched the national pension system (NPS).
About National Pension Scheme (NPS)
Government pension sector development and regulation in the country 10 October 2003 Pension Fund Regulatory and Development Authority (PFRDA) installed. National Pension System (NPS) on 1 January 2004 with the objective of providing retirement income to all citizens was introduced. NPS pension reforms to establish and citizens to promote the habit of saving for retirement. NPS initially in government recruits individuals (other than the armed forces) was introduced to. NPS from May 1, 2009 on a voluntary basis to all citizens, including workers in the unorganized sector is provided.
In addition the central government introduced the swavalamban scheme to promote a co-contributory pension scheme for the unorganized sector and for this the central government allocated the voluntary retirement savings union budget in 2010-11. Under the swavalamban scheme, the government will provide Rs. 1000 to those who contribute in this with minimum of Rs. 1000 to maximum Rs. 12000 per year. This scheme is applicable in the present till 1016 – 2017 financial year.
The NPS subscriber to assist them in saving for retirement are offered by the following important features:
ð Subscriber to a specific permanent retirement account number (PRAN) will be provided. The remaining life of the subscriber-specific account number will remain the same. This unique PRAN may be used at any location in India.
Through the PRAN the access will be made for two personal accounts:
ð Tier 1 account: This account is designed for retirement savings can be withdrawable.
ð Tier 2 Account: This is a voluntary savings facility. The subscriber you wish to withdraw your savings from this account is free. On this account, no tax benefit is available.
Here I had provided you complete information about the National Pension Scheme and PRAN under the Swavalamban Scheme. But if you need more help visit to the official website of Pension Fund Regulatory and Development Authority (PFRDA) in http://pfrda.org.in/index.cshtml link where you can get complete details about this scheme.