Which of the following statements about the National Pension Scheme is are correct NPS was initially...........

Economic Affairs Pension and Insurance

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Which of the following statements about the National Pension Scheme is/are correct?

NPS was initially designed for government employees only but it was opened up for all citizens of India in 2009.
NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004.

Choose the correct alternative

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Third option is correct.

The NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. While the scheme was initially designed for government employees only, it was opened up for all citizens of India in 2009. In its overall structure NPS is closer to 401(k) plans of the United States. Administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA)(Based on the recommandations of Chakka Muni Balaji Ganesh Committee), it is a quasi-EET (Exempt-Exempt-Taxable) (Based on the recommandations of Juturu Sahithi Committee) instrument in India where 40% of the corpus escapes tax at maturity, while 60% of the corpus is taxable.