Tuesday, August 16, 2022

Committed to protect interest of NPS subscribers — Govt

By PTI Updated: Jan 05, 2021 11:56 pm

New Delhi, Jan. 5 (PTI): The government is committed to protect the interest of National Pension System subscribers and has taken measures to streamline the scheme for central government employees, according to a Department of Financial Services communique.

The assertion came following a petition to Prime Minister Narendra Modi from National Movement for Old Pension Scheme (NMOPS) Delhi unit president Manjeet Singh Patel, in which he raised several issues, including revival of the old pension scheme on account of low returns.

NMOPS, formed to oppose the NPS system, is a federation of central and state government employees and their associations.

“It is stated that the introduction of National Pension System (NPS) was a policy decision of the government of India in view of the increasing pension liability of the government,” said the letter issued to Patel by the department, which comes under the Finance Ministry.

Based on time to time feedback from subscribers covered under the NPS and other stakeholders, the government of India, based on recommendations of the committee constituted to suggest measures for streamlining the NPS, has approved proposals for streamlining it, according to the letter.

The proposals include “enhancement of the government’s contribution from the existing 10 per cent to 14 per cent of employee’s pay+DA while keeping the employee’s contribution at the existing 10 per cent” and “providing freedom of choice for selection of pension funds and pattern of investment to subscribers”, it said.

The letter said that the government has also approved proposals of “payment of compensation for non-deposit for delayed deposit of NPS contributions during 2004-2012”, “providing tax deduction to the contribution made under Tier-II of NPS under Section 80 C for deduction up to Rs 1.50 lakh provided that there is a lock-in period of three years, and increase in the tax exemption limit for lump sum withdrawal on exit from the existing 40 per cent to 60 per cent making the entire withdrawal exempt from income tax”.

“It is further assured that keeping in view the concerns of NPS subscribers, the government is committed to protect the interests of the subscribers,” said the letter dated January 1.

Patel said the Centre and state government have implemented a share-market based pension system for their employees, including the ones in autonomous organisations since January 2004.

The NMOPS, a non-profit organisation with over 13 lakh central and state government employees as its members, has been demanding that the central and state governments should come out with relevant legislations to modify the NPS to make it beneficial like the old pension scheme, he said.

By PTI Updated: Jan 05, 2021 11:56:53 pm