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Time of India
20-07-2025
- Business
- Time of India
NPS vs UPS: Should you go for Unified Pension Scheme or stay in New Pension System? Find out what works better for government employees
NEW DELHI: The extension of the deadline for choosing between the New Pension System (NPS) (UPS) to September 30 has given government employees some more time to decide. The government has also clarified that the maturity corpus and pension from the UPS will get the same tax treatment as that from the NPS. Tired of too many ads? go ad free now The NPS is a market linked option where the pension received will be determined by the contributions made by the individual. It is designed for market efficiency and long-term capital growth, assuming that higher equity allocation and compounding over decades will generate a sufficient retirement corpus. The individual carries both the market risk as well as the longevity risk. The UPS is a hybrid model. It retains the defined contribution model of the NPS, but also guarantees a minimum pension that will be indexed to inflation and funded partly by returns from a dedicated pension guarantee fund. NPS vs UPS : Which of these options should you go for? The answer depends on the age and risk profile of the individual. If you are below 35… Young employees below 35 years should stay with the NPS. Young investors can take advantage of the long investment horizon and higher equity exposure (up to 75%). The compounding effect of equity over 25-30 years is likely to yield a larger retirement corpus than any assured return plan. However, one needs to be comfortable with market fluctuations and not get jittery when markets go through a bear phase or remain flattish for longer periods. Over the long term, these ups and downs get smoothened out. If you are between 35 and 50 years… It's a toss up for mid-career employees aged 35-50 years. They should stay with NPS if they have a higher risk appetite because even 15-20 years is long enough time to generate the magic compounding from equity-linked investments. But those seeking stable returns should opt for the UPS. It offers a cushion against future market volatility, especially if retirement is 10-15 years away. If you are close to retirement… Those aged 50 and above should definitely opt for the UPS. At this stage, the corpus accumulation window is quite narrow. The guaranteed pension under UPS brings predictability, which is more important than chasing high but uncertain returns. Volatility at this stage can severely impact retirement income under NPS. Market performance is key Much depends on the returns generated by the market-linked component of both the NPS and the UPS in the coming years. Tired of too many ads? go ad free now Younger subscribers have an edge here because they can afford to take higher risk and stay in the NPS for better returns. On the flip side, their corpus can get dented badly if markets don't live up to expectations.. We used the NPS Trust calculator to know how things will work out for people at different ages. The calculations assume salaries will increase 2.5% a year and Dearness Allowance will increase 6% a year, the person will retire at 60 and live till the age of 80. The total aggregate benefit includes 60% of corpus withdrawn on superannuation and the monthly pension and dearness allowance received till death. Young investors better off in NPS A 25-year-old person who has just started working with a basic pay of Rs 25,000 stands to gain more if she stays in NPS. Even a blended return of 10% will yield more than what UPS offers. But if returns fall to 8-9%, UPS will be better. Expected returns Total benefit received under UPS Total benefit received under NPS 8% Rs 6.48 crore Rs 5.85 crore 9% Rs 6.98 crore Rs 6.93 crore 10% Rs 7.61 crore Rs 8.28 crore 12% Rs 9.35 crore Rs 12.05 crore Mixed bag for middle-aged investors But at 10% returns, both options are neck to neck for a 35-year-old person who has put in 10 years, has a basic pay of Rs 35,000 and has accumulated Rs 12 lakh in retirement savings. Only if the return is more than 10% will NPS work out better. Expected returns Total benefit received under UPS Total benefit received under NPS 8% Rs 4.37 crore Rs 3.67 crore 9% Rs 4.65 crore Rs 4.25 crore 10% Rs 5.01 crore Rs 4.95 crore 12% Rs 5.93 crore Rs 6.79 crore Older investors should go for UPS A 45-year-old person who has put in 20 years, has a basic pay of Rs 50,000 and has accumulated Rs 30 lakh in retirement savings will find the UPS better. Even a 12% return from NPS will not yield what UPS offers. At 8-10%, NPS will be ruinous.
Business Standard
30-05-2025
- Business
- Business Standard
FPSB India and NPS Trust Sign MoU to Boost Financial Education and Retirement Planning Awareness Across India
PNN Mumbai (Maharashtra) [India], May 30: FPSB India, the Indian subsidiary of Financial Planning Standards Board Ltd., and the NPS Trust (National Pension System Trust) have signed a Memorandum of Understanding (MoU) to jointly enable educational outreach, knowledge exchange, and research collaboration to amplify awareness around retirement planning and long-term financial well-being in India. "At FPSB India, we believe that financial education is not just a life skill - it is a life changer. This MoU with NPS Trust is a powerful opportunity to integrate retirement planning as a central theme of personal finance education and reach diverse segments of society with credible, action-oriented guidance," said Krishan Mishra, CEO, FPSB India. The initiative aligns with the larger vision of strengthening long-term financial security and empowering individuals to make informed financial decisions throughout their life stages. Key initiatives under this MoU include: -Joint Awareness Campaigns on NPS, NPS Vatsalya, APY, and other PFRDA-regulated schemes via seminars, digital outreach, and workshops. -Targeted Outreach to institutions, enterprises, government bodies, and the general public to promote retirement planning awareness. -Information Exchange & Research Collaboration to develop high-quality, relevant financial education content. The MoU reinforces the commitment of both organizations to the Government of India's vision of financial inclusion and Viksit Bharat by providing the tools, resources, and knowledge to plan and secure one's financial future. This strategic partnership aims to enhance the public's understanding of retirement planning and personal finance, especially among institutions, enterprises, government bodies, and the general public. About FPSB India: FPSB India is the leading financial planning body in India and is dedicated to establishing, upholding, and promoting professional standards in financial planning throughout India. FPSB India offers the globally recognized CFP® certification, which represents excellence in financial planning through rigorous competency and ethical standards. It is home to over 3,215 CFP professionals in India and part of a global network of organizations representing more than 230,648 CFP professionals worldwide. FPSB India is the Indian subsidiary of Financial Planning Standards Board Ltd. (FPSB Ltd.), the global standards-setting body for the financial planning profession and owner of the international CERTIFIED FINANCIAL PLANNER certification program. FPSB Ltd. owns the CFP, CERTIFIED FINANCIAL PLANNER and the CFP® outside the United States. FPSB Ltd. licenses these marks to FPSB Institute India Pvt. Ltd to administer CFP certification in India. For more information, visit
Business Standard
29-05-2025
- Business
- Business Standard
FPSB India and NPS Trust Sign MoU to Boost Financial Literacy and Retirement Planning
PNN New Delhi [India], May 29: In a landmark step towards empowering Indians with crucial financial education andretirement planning awareness, FPSB India, the Indian subsidiary of Financial Planning Standards Board Ltd., and the NPS Trust (National Pension System Trust) have signed a Memorandum of Understanding (MoU) to collaborate on nationwide financial education and retirement planning outreach programs. The collaboration will include joint campaigns, co-branded learning resources, webinars, and capacity-building efforts aimed to educate individuals, employers, and financial intermediaries on how to better plan one's retirement. The initiative aligns with the larger vision of strengthening long-term financial security and empowering individuals to make informed financial decisions throughout their life stages. This collaboration aims to emphasize the importance of planning one's second innings to ensure a fulfilling post-retirement lifestyle - one that is rich in exploration, purpose, and new experiences. Speaking about the MoU signing Krishan Mishra, CEO, FPSB India said, "At FPSB India, we believe that financial education is not just a life skill--it is a life changer. This MoU with NPS Trust is a powerful opportunity to integrate retirement planning as a central theme of personal finance education and reach diverse segments of society with credible, action-oriented guidance." This strategic partnership aims to enhance the public's understanding of retirement planning and personal finance, especially among institutions, enterprises, government bodies, and the general public. The MoU marks a crucial milestone in India's journey toward building a financially resilient and retirement-ready population. The MoU reinforces the commitment of both organizations to the Government of India's vision of financial inclusion and ViksitBharat by providing the tools, resources, and knowledge to plan and secure one's financial future. Key initiatives under this collaboration include: * Joint Awareness Campaigns on NPS, NPS Vatsalya, APY, and other PFRDA-regulated schemes via seminars, digital outreach, and workshops. * Targeted Outreach to institutions, enterprises, government bodies, and the general public to promote retirement planningawareness. * Information Exchange & Research Collaboration to develop high-quality, relevant financial education content. As the collaboration unfolds, both FPSB India and NPS Trust are committed to delivering impactful programs that not only raise awareness but also build confidence and actionable knowledge among citizens about financial planning, retirement solutions, and long-term wealth creation. (ADVERTORIAL DISCLAIMER: The above press release has been provided by PNN. ANI will not be responsible in any way for the content of the same)
Mint
19-05-2025
- Business
- Mint
NPS Vatsalya: How can you open this pension account meant for minors? An explainer
If you are looking for an investment opportunity for your children, one of the investment options you could explore is NPS Vatsalya, a scheme meant for children under the age of 18. It is opened and operated by the guardian on behalf of the minor. It provides the child with a head start on saving for retirement and gives valuable financial lessons at an early age. It inculcated the importance of financial planning and discipline, which can benefit the child throughout their life. NPS Vatsalya can be opened through points of presence (POPs) registered with PFRDA either online or in physical mode, directly or through Retirement Advisors/Pension Agents, or the online platform (eNPS) of NPS Trust. These are the documents which are acceptable: birth certificate of the minor, school leaving certificate/ matriculations issued by higher secondary board of respective states, passport of minor and PAN. The NPS Vatsalya account is opened by the natural or legal guardian in the name of the minor who is the sole beneficiary of the account. A unique permanent retirement account number is issued in the minor's name. The account is operated by the guardian on behalf of the minor until they reach 18. The minimum contribution is ₹ 1,000 per annum with no upper limit on the maximum contribution. The KYC (Know Your Customer) norms applicable to the guardian are in accordance with the standards given by PFRDA. When there is a court-appointed legal guardian, a copy of the court order regarding the appointment of the legal guardian must be submitted along with the KYC documents. It is not mandatory for the minor to have a bank account or a joint bank account with the minor before opening the NPS Vatsalya account. But it will be required at the time of partial withdrawal or exit before the age of 18. When the minor attains majority, the NPS Vatsalya account is transitioned into NPS Tier I account. However, a fresh KYC of the subscriber should be carried out within three months of reaching majority. Therefore, contributions to the NPS Tier1 Account will be permitted only after fresh KYC is submitted. For all personal finance updates, visit here
India Today
07-05-2025
- Business
- India Today
New NPS rules: How to close your account after renouncing Indian citizenship
The Pension Fund Regulatory and Development Authority (PFRDA) has recently introduced new guidelines for National Pension System (NPS) subscribers who renounce their Indian citizenship. These guidelines clarify the process for closing NPS accounts for individuals who no longer hold Indian citizenship and have not obtained an Overseas Citizen of India (OCI) card. Renouncing Indian citizenship is a legal process where an individual voluntarily gives up their Indian nationality, usually after acquiring citizenship of another country. India does not permit dual citizenship, so this process is required when someone wants to become a citizen of another nation. 'In respect of such subscribers who have validly renounced their Indian citizenship and do not hold an OCI card, the said subscriber is required to forthwith intimate National Pension System Trust (NPS Trust) of the change in status along with proof thereof and PRAN/NPS account held by the subscriber shall be closed and the entire accumulated pension wealth may be transferred to Non-Resident Ordinary (NRO) account only,' stated PFRDA in a circular dated April 21, 2025. WHO CAN OPEN AN NPS ACCOUNT IN INDIA? Any Indian citizen aged between 18 and 70 years can open an NPS account. Additionally, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) can also open an NPS account, as long as they meet the necessary requirements set by the PFRDA. If a subscriber renounces their Indian citizenship, they need to follow a few steps to close their NPS account. Firstly, they must apply for account closure by submitting an undertaking confirming that they have given up their Indian citizenship and do not possess an OCI card. They will also need to provide proof of their renunciation, such as a renunciation certificate, a surrender certificate, or a cancelled Indian passport. 'The subscriber shall submit an application for closure of his/her NPS account along with the following additional documents to NPS Trust: An Undertaking stating that s/he has renounced his/her Indian citizenship and does not hold an OCI card. Valid certificate of Renunciation of India Citizenship/ Surrender Certificate/ Cancelled Indian Passport, issued by competent authority,' mentioned the circular. Once the NPS Trust and the Central Recordkeeping Agencies (CRAs) verify these documents, the account will be closed, and the pension funds will be transferred to the subscriber's Non-Resident Ordinary (NRO) account. This transfer will follow the rules laid out under the Foreign Exchange Management Act (FEMA). If an NPS subscriber renounces their Indian citizenship and does not obtain an OCI card, they should immediately inform the NPS Trust and provide the required documentation. This will help ensure their NPS account is closed smoothly and that their pension amount is properly transferred. These changes aim to streamline the process for individuals who give up their Indian citizenship, ensuring they can manage their NPS funds appropriately even after moving abroad.
