Which of the following statements about the government’s role in NPS is correct?

1. The government contributes 14% of the employee’s basic salary under NPS.

2. The Pension Fund Regulatory and Development Authority (PFRDA) regulates and administers NPS.

3. Under NPS, government employees are guaranteed a fixed pension.

4. NPS is only available for government employees.

Select the correct answer:

The correct answer is option 1

Key Points

• The government contributes 14% of the employee’s basic salary for central government employees under NPS. For private-sector employees, the employer's contribution varies. Hence, Statement 1 is correct.
• The Pension Fund Regulatory and Development Authority (PFRDA) regulates and administers the National Pension System (NPS) under the PFRDA Act, 2013. Hence, Statement 2  is correct.
• NPS does not guarantee a fixed pension; it is a market-linked retirement scheme where returns depend on investments in equity, corporate bonds, and government securities. Hence, Statement 3  is incorrect.
• NPS is not limited to government employees; it is open to private-sector employees and even self-employed individuals who wish to invest for retirement.Hence, Statement 4  is incorrect.