National Pension Scheme Offers Rs 3,000 Guaranteed Pension: Are You Eligible? Check The Rules

The National Pension Scheme (NPS) for traders, including shopkeepers, retail traders, or self-employed persons, offers an assured pension of Rs 3,000 per month as old-age protection upon turning 60. Many may confuse this scheme for traders with the National Pension System (NPS), which is market-linked and offers no fixed pension.

While the National Pension System (NPS), regulated by the Pension Fund Regulatory and Development Authority (PFRDA), is a flexible scheme offered to different segments of people, ranging from government employees to self-employed in the age group of 18 to 70, the other scheme, National Pension Scheme (NPS) for traders, is governed by the Ministry of Labour and Employment and is available only for traders.

Unlike PFRDA-regulated NPS, the other NPS for traders offers a guaranteed pension after the age of 60, which is its core feature to encourage eligible people to come under the social security umbrella. However, these schemes are mutually exclusive, and investing in both schemes is not allowed by the same person.

Are You Eligible To Open A National Pension Scheme Account?

It depends on the individual subscriber’s occupation, annual turnover, and age. This scheme has been designed specifically for people engaged in the unorganised sector, such as self-employed individuals and small business owners, local service operators, and so on. The eligible occupations that are explicitly included in the scheme are:

•             Shop owners and retail traders

•             Rice mill and oil mill owners

•             Workshop owners

•             Commission agents and real estate brokers

•             Owners of small hotels and restaurants, and similar trades

In terms of turnover, the applicant should not have an annual turnover of more than Rs 1.5 crore.

The NPS-Trader scheme particularly caters to the young and mid-career working individuals, with the stipulated entry age between 18 and 40 years.

What Is The Minimum Contribution?

Subscribers are required to make regular monthly contributions starting from their joining date until they reach 60 years of age. The monthly contribution is also affordable, starting with Rs 55 per month and can go up to Rs 200 per month, depending on the age of joining the scheme. The higher the age, the higher the contribution.  When the subscriber reaches the maximum contribution age (60 years), the contribution stops and the monthly payment of pension starts.

Who Are Not Eligible To Open The Account?

To ensure that only the targeted segment of people benefits from the scheme, the government has defined clear exclusion rules specifying who is not permitted to join the scheme.

The applicant is ineligible to join the scheme if:

• They are covered under the pension scheme contributed by the central government, or are active members of the Employees’ Provident Fund Organisation (EPFO), National Pension System (NPS), or Employees’ State Insurance Corporation (ESIC).

• They are income taxpayers.

• They are enrolled under the Pradhan Mantri Shram Yogi Maandhan Yojana or the Pradhan Mantri Kisan Maandhan Yojana.

Essential Documents Required To Open An NPS-Trader Account

To open the account, the eligible traders need to provide their basic identification and banking details. They must hold a valid Aadhaar card and an active savings bank account with an IFSC code.