Pension Update: Are you a federal employee? Is anyone in your family in central government jobs? Then this is important news for you. A large number of employees are continuously protesting against the National Pension Scheme i.e. NPS. Following this, the government has now prepared a new formula for the pension of employees. The report said the existing market-linked pension plan would be replaced and replaced with a minimum pension of 40% to 45% of employees’ last salary, according to a Reuters report.
The update came after the group was formed
The update comes after the government set up a committee on pensions . No official information has been released by the government regarding this. It is believed that the government has taken this step keeping in mind the assembly elections to be held in the states in the next one year and the 2024 Lok Sabha elections.
Now employees contribute 10%
Considering the ongoing agitation of the employees for the past few days and the demand for the old pension scheme, the government has decided to review the pension scheme implemented in 2004. Along with this, a committee was constituted to report on the National Pension Scheme (NPS). In the current National Pension Scheme, employees contribute 10% of their basic salary. Also, the government has to contribute 14%.
50% guaranteed pension under old pension scheme
The pension of employees under NPS depends on the income from the market . Whereas, under the Old Pension Scheme (OPS), 50% of the last drawn salary is paid as guaranteed pension. A Reuters report said the government is preparing to overhaul the existing pension scheme.
40% to 45% pension is expected
After the new rule comes into effect, employees will be able to get 40% to 45% of their last salary as pension, the report said. A finance ministry official told Reuters that the government has no intention of bringing back the old pension scheme (OPS).
Finance Ministry officials said that the new system being developed in the pension system will remove the concerns of the states which reverted to the old pension system. It may be noted that in the past, the states of Rajasthan, Jharkhand, Chhattisgarh, Himachal Pradesh and Punjab have announced to restore the old pension system.
The official said that employees are currently getting about 38 percent of their previous salary as pension. Another official said that if the government guarantees 40 per cent revenue, it will have to meet a deficit of just 2 per cent. However, if there is a decline in the pension amount, the cost will increase.
Advantages of NPS Scheme
Under NPS, tax deduction can be claimed under Section 80C and 80CCD of Income Tax Department. The NPS scheme provides flexibility to investors by allowing them to choose pension funds and investment options as per their needs.
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