NPS is Designed For

1. The Central Government Employees: The Central Government had introduced the New Pension System (NPS) with effect from January 1, 2004 (except for armed forces). NPS has been made mandatory for new entrants in government job sector.All employees of Central Govt. or autonomous departments ( financed by Central Govt.) who have joined on or after January 1, 2004 will be covered by new pension scheme. These employees are not permitted to contribute in General Provident Fund (GPF). Monthly contribution (10% of basic +DA+DP) from the salary of the employee will be transferred to this account from the next month from joining Govt. services. This amount will be matched equally by the Govt. and contributed. As per the present guidelines of Pension Fund Regulatory and Development Authority(PFRDA), contribution towards pension will be invested in the default schemes of three Pension Fund Managers (PFMs), viz, LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited in a predefined proportion, which is mentioned in the Statement of Transaction. Each of the PFMs will invest the funds in the proportion of 85% in fixed income instruments and 15% in equity and equity linked mutual funds. Hence, the employees of Central Government and Central Autonomous Bodies need not mention the details of the schemes while filling up the application form.
2. The State Government Employees: The Central Government had introduced the New Pension System (NPS) with effect from January 01, 2004 (except for armed forces). Pension Fund Regulatory and Development Authority (PFRDA), the regulatory body for NPS, finalised the architecture and appointed NSDL as Central Recordkeeping Agency (CRA) and other entities for New Pension System. Subsequently, various State Governments adopted this architecture and implemented NPS with effect from different dates.

In NPS, a government employee contributes towards pension from monthly salary along with matching contribution from the employer. The funds are then invested in earmarked investment schemes through Pension Fund Managers.

As per the present guidelines of Pension Fund Regulatory and Development Authority(PFRDA), contribution towards pension will be invested in the default schemes for State Government of three Pension Fund Managers (PFMs), viz, LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited. The proportion in which contributions are allocated among these three PFMs is decided by each of the state government, which in mentioned in the Statement of Transaction. Each of the PFMs will invest the funds in the proportion of 85% in fixed income instruments and 15% in equity and equity related instruments. Hence, in the application form for PRAN, the employees of State Government and State Autonomous Bodies need not mention the details of the schemes. 

3.Corporate Sector Employees: A corporate can either define the scheme for all their subscriber or can allow all the subscriber to select their own scheme. If the corporate defines the scheme, then they can have two options. In option 1, the can go for the three PFMs, viz. SBI Pension Funds Private Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited, where allocation is done in a defined proportion and each of the PFMs will invest the funds in the proportion of 85% in fixed income instruments and 15% in equity and equity related instruments. In option 2, the corporate can also choose one out of six Pension Fund Managers(PFMs) and also the percentage in which the selected PFM will invest the funds.

The six PFMs are ICICI Prudential Pension Funds Management Company Limited, IDFC Pension Fund Management Company Limited, Kotak Mahindra Pension Fund Limited, Reliance Capital Pension Fund Limited, SBI Pension Funds Private Limited, UTI Retirement Solutions Limited.

In the Banking Industry In terms of Bank Wage Settlement dated 27.04.2010 the employees who join the services of Banks on or after 01.04.2010; and they shall be covered by a Defined Contributory Pension Scheme, which shall be governed by the provision of the Contributory Pension Scheme introduced for employees of the Central Government w.e.f. 01.01.2004, and as modified from time to time.

More Indian PSU are joining to provide NPS to their employees.

4.Individuals - New Pension System (NPS), Regulated By PFRDA, is an important milestone in the development of a sustainable and efficient voluntary defined contribution pension system in India. It has the following broad objectives:

• Provide old age income
• Reasonable market based returns over the long term
• Extending old age security coverage to all citizens
• Swavalamban Yojana for All Citizens of India & NPS (For economically disadvantaged sections )