Q. Consider the following statements regarding “the National Pension System (NPS)”:
1.It was introduced in 2009.
2.It is the primary pension system for government employees with a pay-as-you-go defined benefit plan.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B
Notes:

Explanation: The National Pension System (NPS) was introduced in January 2004, the primary pension system for government employees with a pay-as-you-go defined benefit plan.

  • NPS for government employees is a defined contribution plan with co-contribution from the government.
  • The value of the pension corpus is marked-to-market, and accordingly, the rate of return is market determined.
  • NPS was extended to all the citizens of the country in the age group of 18-70 years, including the unorganised sector workers (on a voluntary basis) in 2009.
  • In order to ensure that an avenue for savings is available to all sections of society, PFRDA launched “NPS-Corporate Sector Model” in 2011 to provide NPS to the employees of corporate entities, including PSUs.

Source: Economic Survey 2023