New Pension Scheme 291111

8/19/2019 New Pension Scheme 291111

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New Defned

Contributory PensionSystem(NPS) ON RAILWAYS

By

A.K.GANESHAN

Sr.AFA/Establishment-ICC


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"roblems #ae! by $ensionsetor in IN%IA

• &ur $o$ulation is a'ein'(. )he share o# thea'e! in the total $o$ulation is e*$ete! torise #rom +., in 0 to 1. in 23+.

• )his is #urther e*$ete! to rise e4en morera$i!ly to 5.5 o# the total In!ian$o$ulation by 232+.

• In!ians li4in' o4er +3 are e*$ete! to li4ebeyon! 67 yrs(thereby ma8in' it neessaryto su$$ort themsel4es #or a$$ro*imately 7yrs a#ter retirement0 es$eially with thea!4ent o# nulear #amilies.

•

A lar'e $erenta'e o# retirees #all below the$o4erty line !urin' ol! a'e.


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9hy New "ension Sheme:

• .New $ension sheme was moote! as a soial!e#ense mehanism by the ministry o# soial ;ustiean! em$owerment throu'h its "ro;et &ASIS


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New "ension sheme

New Defned Contributory PensionSystem(NPS) is applicable to all

Central Govt. services, includingRPF- except Armed Forces who join

Govt. services on or ater !"-!"-#!!$.


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Salient #eatures o# New"ension Sheme 233,

Retirement "ension• For Railwa% emplo%ees recruited on or ater

!".!".#!!$.• &his scheme has &ier ' and &ier '' accounts.•

&ier ' is mandator% or all Railwa% emplo%ees who joined service or ater !".!".#!!$.• &ier ' contribution will be "!( o )asic Pa% *

+Aplus PA i an%.• 't will be deducted rom salar% ever% month.

Government will ma/e an e0ual matchingcontribution. )oth will be rounded o1 to nearestrupee.

• Recover% will commence rom the month ollowingthe month o joining Railwa% 2ervice.


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• A uni?ue + !i'it "ermanent "ension AountNumber


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• An annual statement ontainin' !etails o#o$enin' balane0 monthly ontribution0ontribution o# Go4ernment an! interestearne! has to be 'i4en to the em$loyee.

• Interest will be 1 #rom ..233,.


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E*it From sheme

• &n e*it it is man!atory to in4est ,3 o#$ension wealth in an annuity


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3anagement o the PensionFund

• &here will be a Central Record 4eeping Agenc% andseveral Pension Fund 3anagers to o1er 5 categories ounds to Railwa% emplo%ees. A,), C based on the ratio oinvestment in 6xed income instruments and e0uities.

• Pending ormation o a regular Central Record 4eeping

Agenc%CR4A, Central Pension Accounting 78cer will actas CR4A.

• An independent Pension Fund Regulator% and+evelopment Authorit%PFR+A will be set up. &hisauthorit% will regulate and develop Pension mar/et. As an

interim measure and interim PFR+A has been set up b%3inistr% o Finance.• &ill regular CR4A and Pension Fund 3anagers are

appointed the contributions are /ept in Public Accounts o'ndia as an interim measure.


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&ther benets to Railwayem$loyees ;oine! a#ter

..233,• 9xisting provision o leave encashment will

continue or P2 Railwa% emplo%ees also.

• 9xisting provision o Provident Fund and oldpension scheme not available or Railwa%emplo%ees covered under P2.

• :ength o ;uali%ing service is not relevant inthis case. &hus no credit o Casual 2ervice onRegularisation as Group + Railwa% emplo%ee.


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A!!itional Relie# on%eath/%isability

•

&n in4ali!ation not attributable to !uty• In4ali! $ension alulate! as $er CCS


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Inome)a* "ro4isions

• Go4ernment Contribution will be inlu!e!in salary inome.

• Em$loyee ontribution shall be eli'ible #or!e!ution un!er 13 CC%


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1.Skewed coverage

2.Inequity in benefits

3.Pressure on public finances

4.Low returns from existing schemes

5.Lack of availability of attractive, long term

Retirement Products.

To sum up_ _ _


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El t iT tfilf t t CPAO


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Electronic Text file formats to CPAO 1.Subscriber’s General information,907 char (Text file name 18 char, NPSGcccyymmsss.TXT) 2. Subscriber Schedule Information,372 char (Text file name 18 char, NPSScccyymmsss.TXT)

3. Amendment of General Information of Subscriber, 1927 char(Text file name 18 char, NPSAcccyymmsss.TXT)

4. Subscriber’s Transfer out Information, 164 char (Text file name 19 char, NPSTOcccyymmsss.TXT)

5. NIL report Information, 18 char (Text file name 14 char, NPGNcccsss.TXT)


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Further Clarifications from Railway Board

•Benefit of Leave Encashment is admissible.

•For 10% recovery DP should also be taken into account.

•From D arrears also !ier"# contributions to be recovered.

•$ontributions should be rounded off to nearest u&ee.

•'henever there is chan(e in the emoluments durin(

middle of the month ) chan(e in the rate of recovery

should be from ne*t month.



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•#nterest be calculated by ssociate ccounts +fficers.

•#n case of transfer) recoveries should be made by the office

that dra,s salary for the ma*imum &eriod of the month.

•-P) $har(e llo,ance) unnin( llo,ance Element ,illcount as Pay for recovery &ur&ose.

•Procedure for calculation of interest on the balances of both E$ and

$ shall be the same method used for com&utin( interest on PF.

•+&tion for investments is not available at this sta(e.


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•etirement ratuity is not available to -P/ subscribers.

•Benefits in the event of death ,hile in service are deceased

em&loyees o,n contribution &lus overnments contribution &lus

#nterest at PF rate on both to the le(al heirs.

• !a* benefits on both E$ and $ !ier"#2,ill be on the basis of

EE!) i.e.) contributions 3 accruals are E*em&t and terminal benefits

are ta*ed in the year of recei&t.

•$asual labour on tem&orary status ,ho are re(ulari4ed after

01.01.5006 only ,ill be covered by -P/.



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•n individual can contribute to !ier"# even after attainin( 70 years of

a(e) but $ ,ill not be credited thereafter.

•Durin( the interim &eriod) there is no &rovision for &ayment of Family

Pension in the event of the death of the em&loyee.

• PFD is the authority to decide on investment schemes 3 benefits

under -P/.

•#f the em&loyee dies even before recovery of contribution starts) hisname ,ill be taken"off the record from -P/.


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Further developments on operationalisation ofNPS…..

PFR+A appointed

ational 2ecurities +epositor% :td. 2+:

appointed as CRA or "! %ears< unction asinterace between PFR+A = PF3s

2)', >&' Asset 3anagement Co., = :'Cappointed as PF3s.

9xcept ? ), 4erala = &ripura, all other "@states are expected to join the scheme

Pension und is expected to grow b% Rs."!!!

crores annuall%


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Further developments on operationalisation ofNPS…..

&o start with onl% two options will be available or theemplo%ees to choose- one is ris/ ree assured

returnsthrough investment in government securities =

second one is ( investment in stoc/ mar/et,"!( in e0uit%lin/ed 3Fs, while the balance invested in government securit%related unds. PFR+A bill is %et to be passed b% parliament2)' would get ( o P2 unds, >&'-A3C $!(, andthe

remaining ( to :'C


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03/15/16 11:52

New Pension Scheme 291111

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