NPS for Government Sector Employees

NPS for Government Sector Employees

Central Government employees are currently being allocated amongst the three public sector pension funds (UTI PFM, SBI PFM, LIC PFM) in the ratio of their returns.

C. NPS FOR GOVT. SECTOR EMPLOYEES

1. Earlier Government, the pension funds of the Central Government employees are currently being allocated amongst the three public sector pension funds (UTI PFM, SBI PFM, LIC PFM) in the ratio of their returns.

The investment pattern for the Central Govt. employees is also stipulated by the Government, having a preponderance of fixed income securities, which can currently go upto 95% while the maximum exposure in Equities is restricted to 15%

2. In the early stages of the movement from Defined Benefit to Defined Contribution, what propelled the Govt to make these choices was, perhaps, the over-riding concerns towards shielding the savings of beneficiaries from volatility and risk, and protecting it from capital erosion.

These anxieties seem justified and essential for the development of NPS in its nascent stages.

The Directed Investment regime was also in keeping with the low financial literacy levels in the country and underdeveloped financial and nascent regulatory environment in the pension sector at that time.