The new pension scheme came into effect from January 1, 2004. There are some advantages and some disadvantages between the two pension schemes.
New Delhi: The central government has set up a committee to look into various aspects of the National Pension Scheme (NPS). Union Finance Minister Nirmala Sitharaman announced the formation of this committee last week. The committee was formed on Thursday. A four-member committee headed by Union Finance Secretary TV Somanathan will report to the Center on NPS. There is tension between the central government and the opposition over the old pension scheme or the new pension scheme. The decision of the BJP government at the center is seen as a change of position in the face of pressure in the face of nationwide movement by employee organizations demanding the return of the old pension scheme. According to them, the Modi government at the Center decided to look into the demands of the employees in the 2024 Lok Sabha polls.
The new pension scheme came into effect from January 1, 2004. There are some advantages and some disadvantages between the two pensions. As per the old pension scheme, half of the salary of the employees was paid as pension at the time of retirement. Because in the old scheme the pension was fixed according to the last basic salary and dearness allowance rate of the government employees. Moreover, there was no provision for deducting money from employees' salaries for pension. The government used to pay the pension through the treasury. The special issue is the DA received every six months of the pension scheme. The pension in this scheme increases when the government appoints a new pay commission.
In that place the entitlements in the new pension scheme are small and the procedure is complicated. In the pension scheme, which was launched in 2004, 10 percent of the money is deducted from the salary of the employees every month. The government also allocates an equal amount of money. The money is deposited in the pension fund which is invested in the stock market by certain government designated financial institutions. In that case, the employee gets pension from the interest earned after retirement. That is, the amount of pension is always dependent on the fluctuations of the stock market.
Besides the central government, almost every state in the country, except West Bengal and Kerala, has implemented new pension schemes in phases. Rajasthan, Chhattisgarh and Himachal Pradesh have recently announced their decision to bring back the old pension scheme under the pressure of labor unions. The opposition Congress has backed the movement to boycott the new pension scheme and announced that it will bring back the old pension scheme if it returns to power at the Centre. There has been a demand within the BJP to cancel the new pension scheme brought during the time of former Prime Minister Atal Bihari Vajpayee. However, Finance Minister Nirmala Sitharaman has said that the Center will not withdraw the new pension scheme. How to make it more attractive to employees is being explored.
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