- Definition: NPS is a pension-cum-investment scheme.
- Launched by Government of India to provide old age security.
- Administered and regulated by PFRDA.
- Differences from Traditional Pension Schemes (OPS):
- Contribution: NPS requires employee contribution (10% of salary) and employer contribution (10-14%). OPS had no employee contribution.
- Benefit: NPS requires purchasing an annuity plan with accumulated corpus (min 40%). OPS provided 50% of last drawn salary as pension.
- Flexibility: NPS offers choice of fund managers and equity/debt investment percentage. OPS had fixed benefits.
- Sustainability: OPS became unsustainable due to rising life expectancy. NPS is designed to be more sustainable.