NPS is the National Pension System introduced by the Government of India for the Public, Corporates and the Government Employees from 01-01-2004. This NPS was set as mandatory for all Government Employees joined on or after 01-01-2004. The existed Defined Benefit System such as old pension scheme was replaced with the Defined Contribution System i.e. NPS.
To get further information log on to https://npscra.nsdl.co.in/central-government.php
For Government Employees - a default investment scheme was designed wherein Funds are invested in pre-defined ratio. To manage funds, the following three Pension Fund Managers were selected,
The allocation of the contributions among the above three fund managers will be decided yearly basis depending on their performance by the Pension Fund Regulatory and Development Authority(PFRDA).
As per Government of India, Ministry of Finance Gazette Notification dated January 31, 2019, the Central Government NPS Subscribers, from April 1, 2019, will have the option of selecting the Pension Funds (PFs) and Investment Pattern in Tier I account. A Subscriber can choose any one of the available PFs and Investment Option as per their choice.
Now, the Government Employees who are NPS subscribers can change their Investment Option from the Standard to Active Choice or Auto Choice
Under Active Choice, subscriber can choose the PFM and investment mode as 100% Government Bonds / Securities (which attracts a consistent return upto 8%)
Under Auto Choice, there would be further 3 categories such as (a) Aggressive (b) Moderate and (c) Conservative
Depending upon subscriber's age, system will automatically allocate investments between
Equity-E, Corporate Bonds-C, Government Bonds-G.
