NPS Minimum Contribution, Tax Benefits And Other Details Under Corporate Model

National Pension System (NPS) is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under NPS, an individual contributes to his retirement account and his employer can also co-contribute for the employee's social security/welfare. There is no defined benefit that would be available at the time of exit from NPS and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth. The greater the value of the contributions made, the greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, and the larger would be the eventual benefit of the accumulated pension wealth.

NPS is managed by the Pension Fund Regulatory and Development Authority (PFRDA).

(Also Read: NPS Withdrawal Rules Changed - 10 Things To Know)

What is NPS Corporate Model?  
PFRDA has launched a separate model to provide National Pension System to the employees of corporate entities, central public sector enterprises and public sector undertakings. This model is known as "NPS -Corporate Sector Model", stated PFRDA on its website pfrda.org.in.

What are the benefits to employees under Corporate Model of NPS?
National Pension System is the cheapest investment product with better growth options through long term market-linked returns, said PFRDA.

National Pension System provides choice of various funds with a flexible investment pattern.

An individual retirement account for record keeping at individual level ensures portability across geographies and employment.

The employee's as well as the employer's contribution towards the NPS account of employee is eligible for tax exemption as per the Income Tax Act, 1961 as amended from time to time.

NPS offers a Tier II account which is a voluntary savings facility with anytime liquidity/withdrawal option.

Routine/quarterly disclosure of the funds helps subscriber achieve better fund management under NPS.

There is an auto choice option for those who do not have the required knowledge to manage their investment.

What are the minimum contributions to Tier I and Tier II account?