Pension Simplified: Past, Present & The Future
What is a Pension?
Pension is your monthly income from your retirement savings or the government's pension program. In simple words, Pension = retirement Income.
It's like your salary post retirement.
Simple enough? Let's dive deep into "How did it all start"!
History of Pension
Romans pioneered the first ever recognizable pension plans in history. In 13 B.C. Augustus had created a pension plan in which retired soldiers received a pension after 16 years of service in a legion and four years in the military reserves.
Even after 2000+ years, pension is still practiced by leading institutions around the globe. The Indian National Army is an exemplar that provides retiring pension to officers on completing a minimum qualifying service of 20 years (15 years in case of the late entrant).
Germany, United Kingdom, Ireland & the United States were the first few nations to build a pension system for the retired workforce.
Pension in India
India’s traditional way of retirement was always around family values. India’s elderly were dependent on younger generations to support them when they retired. Even today many families live together in harmony where parents are supported by earning sons & daughters. Over the years things have changed & many elderly faced problems being dependent in old age.
The Project OASIS Report. (Old Age Social and Income Security Project) on 11 January 2000 presented the changing dynamics of the Indian retirement/pension problem to the Indian Government. With the rise of nuclear families & aging population, elderly’s are no longer supported by younger generations in many parts of the country.
To solve this problem, The Indian government created Pension Fund Regulatory and Development Authority (the regulatory body under the jurisdiction of the Ministry of Finance, Government of India) and made it responsible for overall supervision and regulation of the pension market in India. India’s most popular pension product i.e. National Pension System (NPS) & Atal Pension Yojana(APY) administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA) to increase pension savings among Indians.
Future of Pension
The Future of Pension is Digital, Personalized & Flexible.
PensionBox personalizes the pension planning process to enable individuals to save for themselves and create income post retirement. Retirement savings created from PF or social benefits that are provided either from the employer or the government to support individuals post retirement are not enough to support expenses.
To ensure the corpus or savings created are always right to someone's true needs, PensionBox personalized the entire planning & savings process to beat the goal using AI model generated insights & dynamic planning process.
PensionBox simplifies the National Pension System(NPS), the government's pension scheme for private employees both for retail users and HRs/companies.
If you don’t have an NPS account, you can simply open your pension account within 2 minutes and if you have NPS PRAN already, you will be able track, invest and manage everything free of charge with best user experience.
We never touch or hold your money directly, your investments go safely to your chosen pension fund through approved channels.
We are built with Zerodha as POP , ensuring transparency, data security, and peace of mind. Your retirement savings are protected by regulation and secured by technology.
That’s why, PensionBox brings transparency, zero charges, timely support and freedom to select any pension fund so that you get the best experience investing in NPS & be better future ready.
That’s not it, we help you & your company together to maximise contribution and tax savings with minimal charges & best user experience.
If you are an existing zerodha user then you get a fast login or sign up using kite ID.
Once you are onboarded with kite ID, you get free access to
- Open NPS in 2 minutes
- Track existing NPS
- POP shift or CRA shifting
- Invest in one time or create SIP in NPS
- Withdraw NPS requests & instant withdraw tier 2
- Create your dream retirement plan
- Open NPS Vatsalya for your kid
- Share with HR (To unlock more tax benefits)
- Employer Contribution:
- Contributions made by your employer to your NPS account are tax-free up to 14% of your basic salary under Section 80CCD(2). Do connect us with your HR to enable this for you.
Tax Benefits in Old Tax Regime - Self-Contribution:
- Deduction up to ₹1.5 lakh under Section 80C.
- Additional deduction of ₹50,000 under Section 80CCD(1B) — exclusive to NPS investments!
- This allows you to claim a total deduction of up to ₹2 lakh every year on your NPS contributions.
- Employer Contribution:
- Contributions made by your employer to your NPS account are tax-free up to 10% of your basic salary (Basic + DA) under Section 80CCD(2). Do connect us with your HR to enable this for you.
- This is over and above your personal deduction limits, giving you extra tax efficiency.
Feel free to book a free call to learn more about NPS, NPS Vatsalya, Corporate NPS & PensionBox or contact the support team.
