Q. Consider the following statements:
1.The National Pension System (NPS) is a mandatory retirement scheme for all employees.
2.The NPS classified as ‘Defined Benefit Scheme’.
Which of the statement(s) given above is/are correct?
Answer: D
Notes:
Explanation –
Statements 1 and 2 are incorrect. The National Pension System (NPS) is not mandatory for all employees. It is a voluntary retirement savings scheme for most individuals, although it is mandatory for government employees (except for armed forces) who joined service on or after January 1, 2004. The NPS is classified as a ‘Defined Contribution Scheme’. In a defined contribution scheme, the contributions are fixed, but the benefits received at retirement depend on the investment performance of the contributions.
Source: The Hindu
