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National Pension System (NPS) for organised and unorganised sector employees


NPS is the safest investment option for investors looking for low-risk and schematic investment methods. Under the NPS scheme, individual savings are collected in the form of a pension fund which is then invested by certified PFRDA fund managers into diversified portfolios including the likes of Government Bonds, Corporate Debentures, Bills, and shares. Further, the pooled savings are invested in accordance with the approved investment guidelines and standards.

Eventually, these contributions grow and get accumulated over years, depending on the returns gained on principle investment. National Pension Scheme is not just for employees working in the organised sector. It is even more beneficial for the unorganised sector. Keep reading to know how.

What All Measures Have Been Taken To Include Everyone?

The National Pension Scheme is a great option for any individual who has a low-risk appetite and is planning for early retirement. A regular monthly income in the form of a pension is no less than a boon for individuals retired from private-sector jobs.

This type of systematic retirement can make a huge difference in your lifestyle post-retirement.

Best Features of NPS – Swavalamban 

Easy & Quick – Eligible candidates from the unorganized sector can open their accounts via an aggregator and have an individual NPS-Swavalamban account.

Voluntary – open to anyone aged between 18 to 60 years. Also, individuals are free to decide how much amount they want to invest.

Safe & Secure – It is a safe and secure program regulated by PFRDA. It offers regular monitoring, transparent investment conditions, and performance reviewed by PFRDA-certified fund managers.

Cost-Effective – Subscribers can start investing from as low as 1000 per month. There is no minimum amount requirement.

What All Schemes Are Available?

Swavalamban Yojana is a well-known scheme introduced by the Government of India under which it will contribute Rs. 1000 per year to each NPS subscriber who has opened his account in the years, 2010-11,2011-2012,2012-2013 for a duration of 5 years as follows:

1. Accounts opened during 2010-11 will receive benefits till 2014-15

2. Accounts opened during 2011-12 will benefit till 2015-16.

3. Accounts opened during 2012-13 will benefit till 2016-17.

4. Swavalamban accounts opened during 2013-14 to 2016-17 will get benefits till 2016-2017.

Should the Unorganised Sector Consider Investing in NPS?

More than the organised sector, the Swavalamban scheme is beneficial for individuals working in the unorganised sector. It is a great way to secure regular future income for you and your family post your retirement. When you contribute a small portion of your salary during your working life, it gets accumulated as a pension for your retirement. The longer duration of pension ensures higher returns in the near future.

Unorganised Sectors Are More Secure With NPS

The National Pension Scheme offers more security to unorganised sector workers. The age eligibility of this Yojana for self-employed individuals, shop owners, and others is between 18 and 40 years. Note that their annual turnover should not be more than 1.5 Crore.

Under this voluntary pension scheme, each subscriber would receive a guaranteed minimum pension amount of 3000 every month, after reaching 60 years. And in case a subscriber dies, 50% of his pension will be given to his spouse as a family pension.

Hence, if you’re looking for a low-risk, better returns and safe retirement scheme, then NPS is a great option for you.

Author: Sreekanth Nadella, MD and CEO, KFintech 

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