1. Which regulatory body oversees the National Pension System (NPS) in India?
A. RBI
B. IRDAI
C. PFRDA
D. SEBI
The Pension Fund Regulatory and Development Authority (PFRDA) regulates NPS and other pension schemes in India.
2. Atal Pension Yojana (APY) is primarily targeted at which group?
A. Unorganized sector workers
B. Government employees
C. Corporate sector employees
D. NRIs
APY is designed for workers in the unorganized sector to provide them a fixed minimum pension after 60 years.
3. Under APY, what is the maximum guaranteed monthly pension a subscriber can receive?
A. ₹2,000
B. ₹3,000
C. ₹4,000
D. ₹5,000
APY offers a guaranteed minimum pension ranging from ₹1,000 to ₹5,000 per month, depending on contribution and age of joining.
4. Which of the following is NOT a Tier in the National Pension System (NPS)?
A. Tier I
B. Tier III
C. Tier II
D. Both Tier I and Tier II
NPS has two types of accounts: Tier I (mandatory retirement account) and Tier II (optional savings account). Tier III does not exist.
5. In NPS, what is the minimum percentage that must be invested in Government securities for the default scheme (Auto choice)?
A. 10%
B. 25%
C. 50%
D. 75%
In Auto choice of NPS, the proportion of investment changes with age, but a minimum of 50% is allocated to Government securities.
6. Which of the following pension schemes is specifically for government employees joining service after 2004?
A. NPS
B. APY
C. EPF
D. PPF
The National Pension System (NPS) is mandatory for central and state government employees who joined after January 1, 2004.
7. Which statement is TRUE about Tier II account of NPS?
A. Withdrawals are restricted till retirement age
B. Only government employees can open Tier II
C. It provides guaranteed returns like APY
D. It is voluntary and withdrawals are allowed anytime
Tier II of NPS is a voluntary savings account with flexible withdrawal facility, unlike Tier I which has restrictions.
8. The Employees' Provident Fund (EPF) is applicable to organizations having minimum how many employees?
A. 10
B. 20
C. 50
D. 100
EPF Act, 1952 makes it mandatory for organizations with 20 or more employees to register under EPF.
9. What is the current statutory employee contribution rate to EPF (as a percentage of basic salary + DA)?
A. 8%
B. 10%
C. 12%
D. 15%
Employees contribute 12% of basic wages + dearness allowance towards EPF. Employers also contribute a matching 12%, distributed between EPF, EPS, and EDLI.
10. Which part of employer’s contribution in EPF goes into the Employees’ Pension Scheme (EPS)?
A. 8.33%
B. 3.67%
C. 12%
D. Entire contribution
Out of employer’s 12% contribution, 8.33% goes to EPS (subject to wage ceiling) and balance 3.67% to EPF.
11. What is the lock-in period for investment in Public Provident Fund (PPF)?
A. 5 years
B. 7 years
C. 10 years
D. 15 years
PPF has a lock-in period of 15 years, extendable in blocks of 5 years after maturity.
12. What is the maximum annual deposit limit in a PPF account as per current rules?
A. ₹1 lakh
B. ₹1.5 lakh
C. ₹2 lakh
D. ₹2.5 lakh
Maximum contribution in PPF is ₹1.5 lakh per financial year, and deposits qualify for deduction under Section 80C.
13. Interest earned on PPF is:
A. Fully taxable
B. Taxable after maturity
C. Fully exempt
D. Partially taxable
PPF enjoys EEE status (Exempt-Exempt-Exempt). Contributions qualify for 80C deduction, interest is tax-free, and maturity proceeds are also exempt.
14. An annuity plan offered by insurance companies is primarily designed to:
A. Provide regular income to policyholder after retirement
B. Offer lump sum death benefit to nominee
C. Cover medical expenses during old age
D. Provide term insurance for a fixed period
Annuity plans convert a lump sum into regular payments, ensuring a steady stream of income post-retirement.
15. In a deferred annuity plan, payments to the annuitant start:
A. Immediately after purchase
B. Within one month of purchase
C. Only after the age of 60
D. After a specified deferment period
In deferred annuity, the annuitant invests for a period and payments begin after the deferment period, unlike immediate annuity where payments start right away.
16. What is the minimum age of entry for the National Pension Scheme (NPS)?
A. 15 years
B. 18 years
C. 21 years
D. 25 years
Individuals can join NPS between 18 and 70 years of age as per PFRDA guidelines.
17. In NPS, what portion of the corpus must be compulsorily used to purchase an annuity at the age of 60?
A. 20%
B. 30%
C. 40%
D. 60%
At retirement (60 years), NPS subscribers must use at least 40% of the corpus to buy an annuity plan, while up to 60% can be withdrawn lump sum (tax-free).
18. Under Atal Pension Yojana (APY), what is the age limit for entry into the scheme?
A. 15–55 years
B. 18–60 years
C. 20–60 years
D. 18–40 years
APY allows individuals between 18 and 40 years of age to subscribe, ensuring contribution till age 60.
19. In APY, who bears the investment risk?
A. Government of India
B. PFRDA
C. RBI
D. Pension Fund Managers
APY is a defined benefit scheme where the Government guarantees the pension amount and thus bears the risk.
20. Which of the following correctly states the pension range available under APY?
A. ₹500 – ₹3,000 per month
B. ₹1,000 – ₹5,000 per month
C. ₹2,000 – ₹10,000 per month
D. ₹5,000 – ₹15,000 per month
APY provides a guaranteed monthly pension between ₹1,000 and ₹5,000 after the subscriber reaches 60 years, depending on contributions.
