Scrapping of New Pension Scheme
Representations have been received regarding the implementation of National Pension System (NPS) which, inter alia, include demand that NPS may be scrapped and the Government may re-introduce old defined benefit pension system.
Government has made a conscious move to shift from the defined benefit pay-as-you-go pension scheme to defined contribution pension scheme, now called as National Pension System (NPS), after considering the rising and unsustainable pension bill.
The transition also has the added benefit of freeing the limited resources of the Government for more productive and socio-economic sectoral development.
There is no proposal to replace the NPS with old pension scheme in respect of Central Government employees recruited on or after 01.01.2004.
(e): National Pension System (NPS) had been designed giving utmost importance to the welfare of the subscribers. There are a number of benefits available to the employees under NPS. Some of the benefits are enlisted below:
NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz. pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and Annuity service providers.
It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interest of subscribers of NPS.
- Dual benefits of Low Cost and Power of Compounding- The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.
- Tax Benefits- Contribution made to the NPS Tier-I account is eligible for tax deduction under the Income Tax Act, 1961. An additional tax rebate of Rs.50000 is also allowed for contributions made to NPS Tier-I under Section 80CCD (IB) of the Income Tax Act, 1961.
- Transparency and Portability is ensured through online access of the pension account by the NPS subscribers, across all geographical locations and portability of employments.
- Partial withdrawal- Subscribers can withdraw up to 25% of their own contributions before attaining age of superannuation, subject to certain conditions.
The amount of monthly annuity payable to a Government servant on exit from NPS depends upon various factors such as accumulated pension wealth of the Government servant, portion of accumulated pension wealth utilized for the purchase of annuity and the type of annuity purchased.
Under the defined benefit pension system applicable to Government servants appointed before 01.01.2004, pension is calculated based on qualifying service and the last pay drawn by the Government servant.
Latest Developments on NPS to OPS:
- Notification regarding Old Pension Scheme : NVS December 14, 2020
- Contract for Old Pension Scheme September 17, 2020
- One time option from National Pension System (NPS) to Old Pension Scheme (OPS) to certain category of Central Govt Employees June 26, 2020
- Processing of death claims requests under Atal Pension Yojana (APY) in view of Covid 19 pandemic June 24, 2020
- Technical Resignation or Voluntary Retirement – Option for induction in Old Pension Scheme – Govt Order June 15, 2020
- Mobility of personnel amongst Central, State and Autonomous Bodies while working under Pensionable establishments June 13, 2020
- e-NPS online facility for NPS subscribers to exit and withdrawal May 30, 2020
- NPS Withdrawal Rules – Partial Withdrawal from NPS Procedural Guidelines May 4, 2020
- NPS to OPS Latest News – Railway employees Selected 1.1.2004 but Joined after 1.1.2004 – NFIR March 19, 2020
- Withdrawal National Pension System (NPS) to CG Employees Recruited On or After 1.1.2004 March 10, 2020
- NPS to OPS Latest News – Amendment in CCS (Pension) Rules 1972 – DoPPW Order Dated 17 February 2020 February 18, 2020
- Benefit of Gratuity to CG Employees Covered under National Pension System (NPS) February 17, 2020
- Overseas Citizenship (OCI) Can Investment in NPS October 31, 2019
- NPS Vs GPF – General Provident Fund Facility to National Pension Scheme Governed Employees September 30, 2019
- NPS and OPS: National Pension System and Old Pension Scheme September 25, 2019
- Review the Improvement of National Pension System (NPS) September 17, 2019
- New Pension Scheme to Old Pension Scheme – 1st January 2004 is a Dividing line for CG Employees September 16, 2019
- Interest on delayed/non-deposit of National Pension System (NPS) Contribution September 12, 2019
- NPS to OPS: No Proposal to replace NPS with OPS July 17, 2019
- NPS for CG Employees -Setting up of NPS oversight mechanism July 3, 2019
- Withdrawal of resignation by CG Employees covered under NPS – DoPT June 21, 2019
- NPS to OPS: Abolition of Contributory Pension Scheme – Cabinet agenda by the Govt of AP June 12, 2019
- NPS to OPS : Extension of Old Pension Scheme to the Employees Who Were selected During the Year 2003 April 24, 2019
- Transferring NPS Subscription into GPF account April 19, 2019
- GPF to be introduced to willing NPS employees – AIDEF Circular April 14, 2019
- NPS to OPS: Abolition of NPS and for Restoration of OPS March 25, 2019
- Recognised Political Parties Participating in 17th Lok Sabha General Election: Request to include demands in Election Manifestos March 15, 2019
- Scrap NPS – Restore OPS: NJCA Writes to All Political Parties March 14, 2019
- Proposal to Include in the Election Manifesto to All Parties – NC JCM Staff Side March 13, 2019
- Nationwide Protest by CG Employees Against NPS on 13.03.2019 March 6, 2019
- Guaranteed Pension to CG Employees Governed Under NPS – PFRDA February 15, 2019
- National Pension System to Tripura Govt Employees January 28, 2019
- Withdrawal of Pension Facility in NPS January 3, 2019