What is the New Pension Scheme for Central Government Employees

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New Pension Scheme was launched by the Government of India on 22 December 2003 to secure the financial future of citizens of India.

NPS was implemented from 1 January 2004 for govt. employees who have joined services after December 31, 2004,  except the Armed Forces. 

This pension scheme is regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). 

In April 2007, PFRDA appointed NSDL (National Securities Depository Limited) as the CRA (Central Record Keeping Agency) 

The New Pension Scheme is not just a pension scheme like the old pension scheme was. This is an investment plan also. 

Any eligible person can open two types of accounts under the New Pension Scheme – Tier-I and Tier-II Account. 

A government employee who comes under NPS, has to compulsorily open a Tier-I account under the New Pension Scheme. 

In NPS Tier-I Account, a fixed percentage of govt employee's salary is deposited by him and the government.

Currently, in Tier-I Account, the amount deposited by the employee is 10% and by the government is 14% of the sum of his Basic Pay  and DA 

Tier-II account is opened only if the employee has a Tier-I account. It is totally a voluntary savings account. 

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