Previous Year Question
Who among the following can join the National Pension System (NPS)?
Resident Indian citizens only
Persons of age from 21 to 55 only
All State Government employees joining the services after the date of notification by the respective State Governments
All Central Government employees, including those of Armed Forces, joining the services on or after 1 April 2004
Correct Answer: C
Detailed Solution
Option (c) is correct. In states that adopted the National Pension System, it became applicable to new employees from the date notified by the respective State Government. Therefore, employees joining the concerned State Government after the notified date could be covered under NPS.
The other options can be examined as follows:
Option (a) is incorrect. NPS was not restricted only to resident Indian citizens. At the time of the examination, both resident and non-resident Indian citizens could join it subject to the prescribed conditions. Under the present framework as well, PFRDA permits eligible resident, non-resident and overseas Indian citizens to subscribe voluntarily.
Option (b) is incorrect. In 2017, the general age limit under the All Citizen Model was 18 to 60 years, not only 21 to 55 years. The age limit has subsequently been extended; therefore, the current limit should not be applied retrospectively to this 2017 question.
Option (d) is incorrect for two reasons:
NPS became mandatory for new Central Government employees from 1 January 2004, not 1 April 2004.
Members of the Armed Forces were excluded from this mandatory arrangement.
NPS is a Defined Contribution Pension System. The employee and employer make prescribed contributions, and the accumulated amount is invested by Pension Funds. The final retirement corpus depends on market-linked investment performance; it is therefore different from the earlier Defined Benefit Pension arrangement.
NPS was introduced by the Government of India in 2004 and is regulated and supervised by the Pension Fund Regulatory and Development Authority (PFRDA).