- What is PFRDA?
- Timeline:
- Two accounts
- NPS: Eligibility
- What is PRAN?
- Players in the NPS game
- NPS-lite
- Swavalamban Scheme
- Why NPS is not popular?
- Why Swavalamban/NPS-lite is not popular?
- NPS Corporate Sector Model
- Mock Questions
What is PFRDA?
- Pension Fund Regulatory and Development Authority (PFRDA)
- Union Government created this body via an executive order. (2003)
- To regulate and develop the pension sector in India.
- PFRDA is not a statutory body yet. (Because bill related to PFRDA is yet to be passed).
Timeline:
2003 | PFRDA established |
2004 | (compulsory) New Pension System (NPS), for the new recruits in Government of India (except the armed forces). |
2009 | New Pension System (NPS) is opened up for any citizens in India who wanted to subscribe, even if they are not in Government service. |
Just like we’ve NPS in India, In USA, they’ve a pension scheme for all citizens called “401 (K)”.
Two accounts
In New Pension scheme, there are two types of account
Tier-I | Tier II |
Compulsory for every subscriber | Optional.You can open Tier II, only if you’ve opened a Tier I account first. |
You cannot Premature withdraw money before retirement age. | Can |
NPS: Eligibility
Who can join? | Who cannot join? |
Any citizen of India (age 18-60) | Below 18 and above 60 |
NRI can also join, if he has account in Indian bank. |
|
What is PRAN?
- When you subscribe to New pension scheme, you’re given a unique account number. Known as “Permanent Retirement Account Number (PRAN)”
- Recall that UID/Aadhar also gives you a unique number. But there are differences:
Aadhar vs PRAN: Difference
UID/Aadhar |
PRAN |
Any resident of India | Only Indian citizen |
Any age | Only 18-60 |
Free | You’ve to make regular payments. |
|
PRAN number gives you pension. |
Mentally-unsound and insolvent can get. | Can’t. |
Voluntary | Compulsory for new recruits in Government service (minus armed forces). |
Aadhar vs PRAN: Similarity
- For a private citizen, both are voluntary.
- NRI can apply for both.
Players in the NPS game
Subscriber | Person who joins for New pension scheme.. |
PFRDA | Pension Fund Regulatory & Development Authority. Main boss for NPA. |
CRA |
|
Fund manager | ICICI, UTI, SBI, Kotak etc are the fund managers for NPS.You can decide which fund manager you want to pick up.When you contribute money to NPS, it goes to these fund managers. They invest your money in following*
*You can decide how much you want to invest in each of them. (with some caveats). |
NPS doesn’t provide “uniform” or “guaranteed” return on your investment. Why?
- It varies according to how much of your money is invested in Debt or Equity.
- You can only tell the fund manager how much % to invest in debt / equity but it is upto the fund manager whether he invests in company X or Company Y. Each fund manager has different preference for companies.
Thus different NPS account holders will end up earning different % on their investment. On the other hand, the EPFO (Employees’ provident Fund) offers uniform 8.5% interest rate to all account holders.
NPS-lite
- So far you know that NPS was originally meant for Government employees. Later it was extend to all residents citizens of India. Let’s call that “NPS main”.
- Government of India + PFRDA, also initiated another scheme called “NPS-lite”.
- “NPS-lite” is meant for weaker and economically disadvantaged sections of society.
- How is it different from the “main” NPS?
(main) NPS |
NPS-lite |
Target audience= (mostly) middle class and upwards. | Poor and lower middle class. |
You’ve to give minimum Rs.500 per contribution. | Only Rs.100 |
You need to visit your agent/bank/fund manager/website and pay the money. | An aggregator (e.g. NGO or Microfinance agent) will come to you and collect money. |
you get to decide the proportion of money you want to invest debt vs equities (with some conditions). | by default 85% of your money is invested in debt and 15% in equities. |
Swavalamban Scheme
Started in |
|
Target audience | People working in unorganized sector. |
Condition? |
|
What is the benefit? |
|
Ok, everything sounds well and good with NPS but then
Why NPS is not popular?
Main reason = Commi$$ion.
- Because NPS offers very low Commission to Fund managers (ICICI, SBI, UTI etc.)
- So those players (ICICI, SBI) rather prefer to market their own pension, insurance, retirement plans rather than promoting NPS among their (regular) bank customers.
- Same goes for financial advisor, insurance agents etc. They get more Commission by promoting pension/insurance/retirement plans of private companies to their clients compared to NPS.
Other reasons
- In NPS, there are multiple actors: PFRDA, CRA and fund managers. NPS doesn’t offer uniform rate of return. Common people find this setup difficult and unsecure, unlike tried and trusted LIC or PPF.
- Income Tax benefits under NPS are not significantly higher than the existing investment options.
- NPS is not spending lot of money on ads with film stars / cricketers.
Why Swavalamban/NPS-lite is not popular?
Chindu | @PFRDA chairman, I want you to subscribe more and more poor people in the Swabhiman pension scheme because elections are incoming. |
PFRDA chairman | Forgive me Sir but you’re confusing Swabhiman with Swavalamban.
|
Chindu | Ya ya Swabhiman, Swavalamban… whatever man….I’m not giving UPSC exam so I don’t need to worry about such things. Our job is to harass those aspirants with these catchy terms- not ourselves, Got it? Coming back to the main topic: I want you to get more and more poor people in whatever pension scheme we are running, because general elections are coming. |
PFRDA chairman | I already tried everything I could, but it’s just not working! |
Chindu | Then hold meetings Jholachhap NGOs and bogus microfinance companies and tell them to use their network of grassroot workers to form more self help groups (SHG) and get more and more subscribers. |
PFRDA chairman | It is Easier said than done because
|
Chindu | Man Are you suggesting that I should stop MNREGA and Direct cash transfer so people can put more money in NPS???????? |
PFRDA Chairman | You’re putting words in my mouth. But yes, sounds like a good idea. |
Chindu | Well it is definitely not a good idea sir-ji. Because MNREGA, Direct benefit transfer and food security act are the three main selling points of our party’s election campaign. |
Jokes apart, when it comes to MCQs, DONOT make silly mistakes the schemes starting with “S”
Swavalamban |
Government gives subsidy on NPS account of unorganized sector. |
Swabhiman |
Increase banking penetration in remote rural areas. |
Sabla |
(Rajiv Gandhi) Scheme for Empowerment of Adolescent GirlsGives them food, skill-training and health education. |
Swadhar |
This provides food, shelter, support, counseling to women in difficult circumstances e.g.
|
Swajaldhara |
Improving drinking water availability in the rural areas |
STEP |
Support to Training and Employment Programme. |
NPS Corporate Sector Model
- Started in 2011.
- Helps firms in organized sector, to move their employees to the New pension scheme.
Mock Questions
- Correct Statement about NPS?
- Initially it was meant for employees in central service and armed forces.
- PFRDA, a statutory body, is responsible for implementation of NPS.
- Only nationalized banks can work as fund managers of NPS.
- None of above
- PRAN is the account number of _______ subscriber.
- EPFO
- ESIC
- NPS
- LIC
- Correct Chronology (older to newer)
- Swabhiman, NPS, Swavalamban
- NPS, Swavalamban, Swabhiman
- Swabhiman, Swavalamaban, NPS
- None of above
- An NRI is eligible for
- Aadhar card
- New pension scheme
- Voting from his respective constituency in India
- All of above
- None of above
- What is the purpose of Swavalamban scheme?
- Provide scholarships to poor girls pursing higher education
- Provide financial assistance to self help groups in rural areas.
- Increase subscription of NPS
- Improve banking penetration in rural areas
- What is the purpose of Swabhiman scheme?
- Provide scholarships to poor girls pursing higher education
- Provide financial assistance to self help groups in rural areas.
- Increase subscription of NPS
- Improve banking penetration in rural areas
Q7. Who among following, will definitely lose his job/position if he is declared insolvent?
- Central Vigilance Commissioner
- Chairman/ member of NHRC
- Judge of supreme court
Choices
- Only 1 and 2
- Only 2 and 3
- Only 1 and 3
- None of above
Q8. Correct statement
- Every NPS account holder is eligible for Aadhar.
- Every Aadhar card holder is eligible for NPS.
Choices:
- Only 1
- Only 2
- Both
- None
Q9. Incorrect Match
- Sabla: Widows
- Swabhiman: Physically Challenged
- Swavalamban: Unorganized Sector
- Swadhar: Women In Difficult Circumstances
Choices
- Only 2 and 3
- Only 1 and 2
- Only 3 and 4
- All of them
Mains
- Swavalamban (5m)
- Write a note on New Pension Scheme and its salient features (12m)
- Discuss various pension schemes launched by Government of India for the weaker sections of society. (15m)
Interview
- What are the flaws in NPS? If you were the chairman of PFRDA, how would you correct them?
- If LIC can be successful, why can’t NPS?
- Government shouldnot increase FDI in pension sector because it’ll hurt NPS. Agree/disagree?
BHARAT SARKAR KI JAN KALYAN YOJANA SE JUDKAR AAP अगर कोई 18 साल का व्यक्ति इस प्राण कार्ड (PRANCARD) मे सालाना सिर्फ 1000 रुपये भरता है तो भारत सरकार उसको हर साल 1000 रुपये का अनुदान (ग्रांट) देती है, साल के आखिर में इस 2000 (1000 +1000 ) रुपये पर उसे औसतन 12% ब्याज देती है, याने 1000 के सामने उसको 2240 मिले| इस तरह हर साल चक्रवर्ती ब्याज से उसका पैसा बढ़ता रहता है, जब ये 18 साल का व्यक्ति उसकी 60 साल की उम्र तक सिर्फ 43000/- रुपये इस प्राण कार्ड में जमा करता है तब सरकार के पास उसके लगभग 24,21,625/- जमा होते है. तब वो 61वे साल से मरते दम तक हर महीने लगभग 16,500/- की पेंशन का हक़दार बनता है.
2) ये व्यक्ति अगर सालाना 12000/- प्राण कार्ड में जमा करता है, तब 60वे साल मे सरकार के पास उसके लगभग 1,57,40,562/- जमा होते है, तब वो 61वे साल से मरते दम तक हर महीने लगभग 1,05,000/- की पेंशन का हक़दार बनता है. अगर बीच मे ही उसकी मृत्यु हो जाय तो उसके परिवार को उसी समय उसका जमा पैसा ब्याज के साथ मिलजाय
CONTECT NO-9571147495,8058457190
Hello Sir/Madam,
Nice to know about you. I am working for the Central Govt. Project NPS-Swavlamban Pran Card with the Nagpur based company Jansevamission (http://jansevamission.org/ )….Our company is giving Pran Card Free of Cost alongwith a business opportunity to make upto 2000/- daily. This PRAN CARD scheme (NPS scheme) is authorized by the government to a government allowed aggregator which has legal agreement with our company,Jansevamission …Our company has also tie-up with two other aggregators appointed by govt. for pran card ….apart from that , our company has its own branch for pran card. …Our company has a record in the PFRDA that in the last 62 days we have delivered more than 14000 pran card to people with 1000/- deposit….nobody so far could have done that…..
For more information, plz visit my wall latest post at https://www.facebook.com/sandeep.goel.56 or u can also contact me at 9355817442 after 6:30 pm
thanks dinesh sir. aap se baat karke achha laga.
sir hame JAN KALYAN YOJANA. ka vebsite chahiye.
http://nandalalmorality.in/projects.php
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contect-no-9571147495,8058457190
apko pran card banane ke liya reg. fee 700Rs iske badle 100Rs Bal.pran cad me neno card electronic mobile chif nomini faceliti & marketing job
contect-no.9571147495,8058457190
BHARAT SARKAR KI JAN KALYAN YOJANA SE JUDKAR AAP अगर कोई 18 साल का व्यक्ति इस प्राण कार्ड (PRANCARD) मे सालाना सिर्फ 1000 रुपये भरता है तो भारत सरकार उसको हर साल 1000 रुपये का अनुदान (ग्रांट) देती है, साल के आखिर में इस 2000 (1000 +1000 ) रुपये पर उसे औसतन 12% ब्याज देती है, याने 1000 के सामने उसको 2240 मिले| इस तरह हर साल चक्रवर्ती ब्याज से उसका पैसा बढ़ता रहता है, जब ये 18 साल का व्यक्ति उसकी 60 साल की उम्र तक सिर्फ 43000/- रुपये इस प्राण कार्ड में जमा करता है तब सरकार के पास उसके लगभग 24,21,625/- जमा होते है. तब वो 61वे साल से मरते दम तक हर महीने लगभग 16,500/- की पेंशन का हक़दार बनता है.
2) ये व्यक्ति अगर सालाना 12000/- प्राण कार्ड में जमा करता है, तब 60वे साल मे सरकार के पास उसके लगभग 1,57,40,562/- जमा होते है, तब वो 61वे साल से मरते दम तक हर महीने लगभग 1,05,000/- की पेंशन का हक़दार बनता है. अगर बीच मे ही उसकी मृत्यु हो जाय तो उसके परिवार को उसी समय उसका जमा पैसा ब्याज के साथ मिलजाय
CONTECT NO-9571147495,8058457190