NPS was launched in the year 2004 by the Indian government as a defined contribution pension system. This was the time that the government realised the folly of the indexed pension that it All employees who joined the Indian government service from 2004 come under this scheme. The previous defined benefit pension system for government employees is a huge financial burden, which the government wanted get relieved of gradually.
NPS is now being made available to the common public from May 2009. Any one can avail himself or herself of this scheme. I am planning to do a small series of ‘What is the NPS’ – right from what is the architecture, the cost, the administration, the jargon (CRA. POP, vesting, annuitizing etc.) over the next couple of weeks.
Even though the plan is just been thrown open to the common man it already has about 500,000 participants – being the government employees who are no longer entitled to a Defined benefit but have to do a defined contribution (oops jargon again – will clarify all this in the jargon buster ….over the next 2-3 weeks
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