7th Pay Commission expressed its regret about transition from OPS to NPS

7th Pay Commission expressed its regret about transition from OPS to NPS

7th Pay Commission expressed its regret about transition from Old Pension Scheme to New Pension Scheme in its report.

2004-2011 Entrants : Government employees who have joined service between 2004 and 2011 have suffered due to delay in finalizing the structure of the NPS and the issue of detailed instructions. Although they have made regular contributions, in many cases, this money and/or counterpart contributions were not deployed in the market. In the case of AIS officers, some states are yet  to release counterpart contributions or pay interest on delayed contributions. This has led to a situation where the accumulated corpus even after 11 years of service could be meagre. It is necessary that this situation which arose during the transition from OPS to NPS be addressed.

The Commission therefore recommends that Central Governments and State Governments should, in a time bound manner, ensure that all the due contribution along with compounded interest, where contributions have been delayed, be deposited in the accounts of the beneficiaries. Advisories should be issued to the State Governments to deposit amounts, if not already done, in respect of NPS beneficiaries belonging to All India Services.

Many Association have pointed out that unlike the facility under GPF, it is not possible to make withdrawals under NPS, even to meet obligatory social expenditure. This forces employees towards increased indebtedness as they have to borrow from elsewhere.

The Commission notes that under the NPS Tier-I account, a subscriber is permitted to make partial withdrawal of twenty five percent of the contributions made to his/her individual pension account for certain specified purposes. Such withdrawals are permitted a maximum of three times during the entire tenure of subscription and a period of at least five years should have elapsed between two such withdrawals.

The Commission further notes that there exists a voluntary Tier-II account. Under this account, a subscriber can, at any time, withdraw the accumulated wealth either in full or part and there is no limit on such withdrawals provided the account has sufficient balance of accumulated pension wealth to cover the amount being withdrawn. However, the Tier-II account is yet to be made operational. The Commission therefore recommends that PFRDA should take steps to make the Tier-II accounts operational as early as possible to enable the NPS subscribers the facility of withdrawals from their accounts in case of requirement.

Transparency under NPS : Many associations and individuals have complained that the information relating to the NPS is inadequate, resulting in high degree of uncertainty in the minds of contributors about post-retirement benefits. The Commission noted that PFRDA sends a communication to every participant each month with the current pension wealth and the latest contribution that has been credited. The Commission recommends that focused efforts be made to capture email addresses and mobile numbers of subscribers so that seamless communication is ensured for all subscribers. The Commission recommends that consultation with stakeholders should also be held periodically in different parts of the country.

The Commission notes that no department of Government of India is taking ownership of the NPS. The Commission recommends that a Committee consisting of Secretary, Department of Financial Services, Secretary, Department of Pensions and Pensioners Welfare and Secretary, Department of Administrative Reforms and Public Grievances may be constituted to review the progress of implementation of NPS. The Commission also recommends that steps should be taken for establishment of an Ombudsman for redressing individual grievances relating to NPS.

Tax Treatment under the NPS : NPS is under the Exempt–Exempt – Tax (EET) regime while the General Provident Fund under the OPS is under Exempt–Exempt–Exempt (EEE) dispensation. Under the NPS, while the contributions and the accumulations are tax-exempt, withdrawals are taxable. As such, this is an inferior tax treatment when compared to other pension programmes such as General Provident Fund, Contributory Provident Fund, Employees Provident Fund and Public Provident Fund wherein contributions, accumulations and withdrawals are tax-exempt.

The Commission feels that tax neutrality should be ensured across various avenues for long term savings for post retirement incomes so that the employees covered by NPS are not at a disadvantage. The Commission therefore recommends that withdrawals under the NPS should be tax-exempt to place NPS at par with other pension schemes. The Commission also recommends that the service tax levied at the time of annuity purchase by NPS subscribers should be exempted.

NPS subscribers of Central Government are 14.1% of the total subscribers as Jan 2016

NPS subscribers of Central Government are 14.1% of the total subscribers as Jan 2016

Press Information Bureau 

Government of India

Ministry of Finance

02-February-2016 16:35 IST

1.15 Crore Subscribers for National Pension System (NPS) as on 23.1.2016

National Pension System (NPS) had 11,459,555 subscribers with a total corpus of Rs. 90, 327 crore as on 23rd January, 2016. The total Assets under Management are worth Rs. 109,140 crore while Assets under Management per subscriber is Rs. 95,000 on an average.

The number of NPS Subscribers of the Central Government are 1611,020 with a total corpus of Rs. 34,754 crore while subscribers from the different State Governments are 2,859,094 with a total corpus of Rs. 45,486 crore. The number of NPS subscribers in the Corporate Sector are 448,509 while in Unorganized Sector is 128,484, the total being 576,993. The number of subscribers under NPS Lite include 4,463,637 and under Atal Pension Yojana (APY) 1,948,811, with a total number of subscribers 6,412,448 in these two categories.

NPS subscribers of Central Government are 14.1% of the total subscribers while that of the State Governments are 24.9%. The NPS subscribers under NPS Lite constitute 39% while under APY 17% of the total subscribers.

Since PFRDA has completed two years of its statutory status on 1st February, 2016, to mark this occasion, PFRDA in collaboration with all its intermediaries in the National Pension System including Central and State Governments’ Nodal Offices, POPs, Aggregators, Central Recordkeeping Agency and NPS Trust etc. is observing NPS Service Week from 1st to 6th February, 2016. This week-long campaign is being dedicated to service-orientation towards the subscribers and aimed at awareness building and improved information dissemination. During this Service Week, besides sharing of information on the range of functionalities and services now available under the NPS, the subscriber community will be apprised about the need for constant updation of data/information to enable the system to operate at its optimum service level, so that the intended benefits can reach all the employees/subscribers under NPS. Besides, the subscribers will also be able to make best use of all the opportunities and facilities.

The Pension Fund Regulatory and Development Authority (PFRDA) is organizing the 2nd Pension Conclave in national Capital on 4th February 2016 with the theme, “Towards Universal Pension: Coverage, Adequacy and Sustainability” in which all the stake holders are expected to participate and share their experiences. PFRDA proposes to use this occasion to acknowledge/award the best performing banks and Post Offices in mobilization and registration of subscribers under the Atal Pension Yojana (APY) up to 31st December 2015, and institute awards for best performing POPs under the Voluntary segment of the National Pension System.

Earlier, PFRDA launched NPS Awareness Programme for State autonomous bodies, Unorganized Sector, Corporate Sector and other categories in order to highlight the benefits of joining NPS and has requested the various State Governments to implement NPS more inclusively among the State Autonomous Bodies, Boards, Corporations, Societies, Universities and State aided institutions under various State Government departments. During the awareness programme, key features and benefits of NPS, details and process of joining NPS, details about NPS architecture investment and exit guidelines of NPS are highlighted.

Source: PIB News

PFRDA - New Pension Scheme : Clarification of Deferred withdrawal of lump sum

New Pension Scheme : Clarification of Deferred withdrawal of lump sum – PFRDA

PENSION FUND REGULATORY AND 

DEVELOPMENT AUTHORITY

1st Floor, ICADR Building, Plot No. 6,

 Vasant Kunj Institutional Area, Phase – II, 

New Delhi – 110070

CIRCULAR

PFRDA/2015/24/EXITS/1

October 29, 2015

To,
NPS Trust, All POP’s, Aggregators, CRA,CentraI, State Governments and All Subscribers

Dear Sir/Madam,

Sub: Clarification of Deferred withdrawal of lump sum

PFRDA (Exits and Withdrawals from Nation Pension System) Regulations 2015 provides option to subscriber to defer withdrawal of lump sum (60%) up to the age of 70 years.

Under the Deferred withdrawal facility, the subscribers at the time Of exit from National Pension System (NPS) can exercise an option to defer the withdrawal of eligible lump sum withdrawal and stay invested in the NPS. Subscriber has an option to withdraw the deferred lump sum amount in maximum ten annual installments up to the age of 70 years or withdraw the entire amount at once by giving 15 days advance notice during such a period of deferment.

If no such notice is given, the accumulated pension wealth would be automatically monetized and credited to his bank account upon attaining the age of 70 years.

This is for the information of all concerned. The circular also is being placed on PFRDA website at http://www.pfrda.org.in, NPS Trust website www.npstrust.org.in and CRA website at http://www.npscra.nsdl.co.in.

Yours faithfully,

sd/-

Subroto Das

Chief General Manager

Authority: http://pfrda.org.in/

Exemption of Railway employees from New Pension Scheme/National Pension System (NPS) – NFIR writes to Railway Board on 24th October 2015

Exemption of Railway employees from New Pension Scheme/National Pension System (NPS) – NFIR writes to Railway Board on 24th October 2015

NFIR

National Federation of Indian Railwaymen

No. IV/NPS/PFRDA BILL/Part I

Dated : 24/10/2015

The Suresh Prabhu,

Hon’ble Minister for Railways

(Railway Board)

Rail Bhavan

New Delhi

Sub: Exemption of Railway employees from New Pension Scheme/National Pension System (NPS)-reg.

Ref: GS/NFIR’s letter No. IV/NPS/PFRDA BILL dated 26/08/2015 addressed to the Railway Board (MS).

The Government of India had introduced New Pension Scheme (NPS) applicable to the Central Government employees appointed on or after 01/01/2004. Under the scheme, 10% of the Pay of each employee is deducted from his/her salary every month and equal amount is contributed by the employer and credited to the NPS Trust controlled by the PFRDA. However those who were appointed prior to 01/01/2004 have been covered under “Liberalized Pension Scheme” and their pensionary benefits like Pension, Family Pension etc., are guaranteed by the Government. While the New Pension Scheme now being re-named as “National Pension System” is not applicable to Defence Forces, the same had unfortunately been made applicable for Railway employees with effect from 01/01/2004.

2. The duties, responsibilities, risk involved, remoteness, arduous and hazardous conditions of railway employee are akin to that of Army Personnel and therefore NFIR has been urging upon the Government as well the Railway Ministry to exempt Railway employees from New Pension Scheme. The Federation was compelled to take strike ballot on pending demands, among them “Abolition of New Pension Scheme” was one of the most important issues. Responding to the demands, the Railway Board (CRB, MS, FC) had held separate meeting with the Federations on 7’th February 2014, wherein the justification for exempting railway employees from New Pension Scheme was discussed, consequently the Railway Ministry had agreed to approach the Government. Hon’ble MR Shri Mallikarjun Kharge had sent communication to the Finance Minister on 29th March, 2014 explaining case and justifying that the Railways deserves to be exempted from NPS. Unfortunately, there has been no positive decision from the Government till now.

3. In this context, NFIR also brings to your kind notice that the JCM (Staff Side) as well the Federations have decided to launch industrial action as the Government has not responded to the charter of demands of Central Government employees. During the meeting with you on 6th August,20l5, we have also mentioned some of the issues continued unresolved when CRB and Member Staff were present.

Railway Board (CRB, NPS & FC) held another meeting with the Federations on lst October 2015 on eight short listed demands which include “Exemption of Railway Employees from New Pension Scheme”. After discussions, the Railway Board has agreed to pursue the case with the Government again. In this connection, NFIR has earlier sent a communication with full details to the Railway Board (MS) vide letter No. IV/NPS/PFRDA BILL dated 26/08/2015 (copy enclosed) to facilitate Railway Ministry to prevail upon the Government to grant exemption to Railway from NPS. Federation is confident that the Railway Ministry is taking necessary action on the inputs given by the NFIR for presenting the case before you.

4. It is, however, shocking to note that a notice has been issued by the National Pension System Trust (NPS Trust) to all the subscribers under NPS that the Trust will start recovering fee/charge @ 0.01% of the AUM on daily accrual basis to meet its expenditure w.e.f. 1st November 2015. (Copy of Notice dated 19/10/2015 is also enclosed) This provocative and arbitrary decision has generated deep sense of disappointment and anger among railway employees”

In view of the above, NFIR invites your kind attention to the communication dated 29th March 2014 of your predecessor (Shri Mallikarjun Kharge) to the Finance Minister and in-puts given by the Federation vide letter dated 26/08/2015 for taking special initiative at the level of Government for exempting Railway employees from “New Pension Scheme” (NPS) as a special case.

With regards.

Yours Sincerely

sd/-

(Dr.M.Raghavaiah)

General Secretary

Source: NFIR

Payment of Gratuity and Guaranteed Benefits under New Pension Scheme (NPS) Beneficiaries – BPMS Resolutions

Removal of ceiling for Compassionate Appointment, Payment of Gratuity to NPS Beneficiaries and Minimum Guaranteed Benefits under NPS

BPMS Resolutions adopted in CEC Meeting held in Hyderabad

BHARATIYA PRATIRAKSHA MAZDOOR SANGH

(An All India Federation of Defence Workers)

(An Industrial Unit of B.M.S.)

(Recognized by Govt of India, Min of Defence)

Central Office: 2A, NaVin Market, Kanpur – 208001

REF: BPMS/ RESOLUTION/ 10(7/1/M)

Dated: 21.09.2015

To,

The Secretary,

Govt. of India, Min of Defence,

South Block, DHQ PO,

New Delhi – 110011

Subject: Resolutions adopted in the Central Executive Committee meeting of BPMS.

Respected Sir,

With due regards, it is submitted for your kind information that the Central Executive Committee meeting of this federation has held on 08th & 09”” Sep. 2015 at Dr APJ Abdul Kalam Complex, DRDO Township, Kanchanbagh, Hyderabad and 03 Resolutions have been unanimously adopted by the CEO of the federation & the same are enclosed herewith for your kind consideration and further necessary action please.

This federation is in full hope to get favourable consideration in this regard.

Thanking you in anticipation.

Sincerely yours

(M P SINGH)

General Secretary

RESOLUTION No. 1: Payment of Gratuity to NPS Beneficiaries

In spite of our strong opposition, the Government has made the New Pension Scheme applicable to all recruits after 01-01-2004. While continuing our opposition to the scheme, BPMS have given several inputs from time to time to ensure that maximum benefit be given to the employees.

As a part of this, the entire bye-laws and other issues pertaining to the formulation of the New Defined Contribution Pension System (popularly known as the NPS) was studies and it was found that as per clarification issued by the Ministry of Finance (Department of Economic Affairs) the NPS is a replacement for only Pension, and thus, other benefits provided to employees like Gratuity remains constant i.e. the employees enrolled under NPS are also eligible for Gratuity as per provision of extant law.

After vigorously pursuing the issue, the Department of Pension & Pensioners Welfare had issued O.M. No. 38/41/06/P&PW (A) DT. 05-05-2009, with the approval of Cabinet to provide for Invalid Pension, Family Pension, Disability Pension, Extra-Ordinary Family Pension, Retirement Gratuity and Death Gratuity in respect of NPS subscribers on provisional basis.

Consequent thereof, BPMS has been consistently demanding that this “Provisional” basis be converted into a PERMANENT BASIS feature of the NPS. The Government has, now vide DC. No. 1(4)/E-2006 DT. 17-08-2015 of JS (Pers) of the Ministry of Finance (Department of Expenditure) circulated a note proposing that the budget for the payment of gratuity be projected from the office of the Controller General of Accounts.

Subsequently, the issue has been earmarked to various Ministries, who in turn have further asked comments from various channels.

The federation having taken stock of the present situation feels that asking comments etc. is not required on a Policy decision and demands that the feature of payment of Gratuity to all NPS subscribers upon Retirement or Death, be made a Permanent feature, without further loss of time.

This resolution is therefore, unanimously adopted at the Central Executive Committee Meeting of the Federation on September 08th, 2015.

RESOLUTION No. 2: Minimum Guaranteed Benefits under NPS

In spite of our strong opposition, the Government has made the New Pension Scheme applicable to all recruits after 01-01-2004. While continuing our opposition to the scheme, BPMS have given several inputs from time to time to ensure that maximum benefit be given to the employees.

Even after a lapse of more than 10 years since the arbitrary implementation of the scheme, the Government has failed to formulate a policy ensuring “Guaranteed Minimum Pension” to the subscribers of the NPS.

Having examine the issue in detailed, BPMS now demands that without any further waste of time, the Government should frame a policy to ensure that irrespective of the financial/market conditions at the time of Retirement and/or Death of the NPS subscriber, he should get a minimum guaranteed pension equivalent to FIFTY PERCENT of his last drawn Basic Pay plus dearness relief for neutralization of price rise.

This Central Executive Committee Meeting of the Federation held at Hyderabad, on September 08th, 2015, hereby RESOLVES, to call upon the Government to frame a policy to ensure that the NPS subscribers receive a minimum guaranteed pension equivalent to FIFTY PERCENT of his last drawn Basic Pay plus dearness relief thereupon at par with Central Government Employees/Pensioners.

RESOLUTION No. 3: One time relaxation & removal of ceiling for Compassionate Appointment

The Government has imposed an arbitrary limit of 5% only for filling up of vacancies on compassionate grounds, subject to several conditions. As a result of this decision, many families are living in distress and the very concept of helping the families of those employees who die in harness, stands defeated due to imposition of this ceiling.

The Federation has been taking up the issue at all levels to relax the ceiling to enable the deserving candidate get employment and thereby provide help to the families of the deceased. Having examine the issue in detailed, BPMS now demands that without any further waste of time, the Government should frame a policy to ensure that as a onetime measure, all existing cases of compassionate appoints are provided suitable employment assistance immediately.

This Central Executive Committee Meeting of the Federation held at Hyderabad, on September 08th , 2015, hereby RESOLVES, to call upon the Government to frame a policy to ensure that one time measure, all existing cases of compassionate appoints are provided suitable employment assistance immediately and to further scrap the artificial ceiling of 5% with immediate effect.

(M P SINGH)

Source: BPMS

Exempting Railway employees from the NPS and also consider ONE RANK ONE PENSION – NFIR

Exempting Railway employees from the NPS and also consider OROP – NFIR

NFIR

National Federation of Indian Railwaymen

3, CHELMSFORD ROAD,NEW DELHI – 110 055

Affiliated to:

Indian National Trade Union Congress (INTUC)

International Transport Workers’ Federation (ITF)

No.IV/NPS/PFRDA BILL

Dated: 06-09-2015

Shri Narendra Modi,
Hon’ble Prime Minister of India
South Block,
Raisina Hills,
New Delhi.

Respected Sir,
Sub: Uniform Pension Scheme to retiring Railways employees at par with ex-servicemen – reg.

At the outset, the National Federation of Indian Railwaymen (NFIR) thanks the Government for conceding to the demand of ex-Servicemen for introduction of “One Rank – One Pension” for them.

In this connection, I would invite your kind attention to the case of Railway employees numbering over 1.3 million as placed below:-

The Railway employees have been subjected to injustice as a result of introduction of New Pension Scheme (which is a contributory pension scheme) with effect from 01/01/2004. Consequently, those employees who joined railways on and after 01-01-2004 are governed by the contributory pension scheme with present nomenclature “New Pension System”(NPS).

Presently, there are two sections of Rail Workforce – One governed by the Liberalized pension Scheme (applicable to pre 01-01-2004 appointees) and the other one governed by the contributory pension scheme i.e. NPS applicable to post 01.01.2004 appointees. Since 2004, NFIR has been pressing the Government of India and the Ministry of Railways to withdraw New Pension Scheme as the duties and responsibilities of Railway employees are very complex, Complicated and their working conditions are arduous as they perform duties at remote places, extremist infested areas, jungle areas, without any supply chain. Vast percentage of Railway employees cannot afford to have timely medicines, social life, schooling facilities etc.,

Pursuant to the discussions held with the Railway Ministry on our pending demand seeking abolition of New pension-Scheme in Railways, the then Railway Minister Shri Mallikarjun Kharge had agreed with the demand and accordingly he had sent a communication to the Finance Ministry on 29-03-2014 duly explaining the nature of duties of the Railway employees and seeking Government’s approval for exempting the Railway employees from the NPS whereby they can be governed by the Liberalized pension scheme. This issue is continued to remain unresolved.

For your kind appreciation, I mention here that according to the report of the Dr.Anil Kakodkar committee, Submitted to the Railway Ministry in the year 2012. the death rate of Railway employees in the courses of performing duties was much larger than the public. I quote below the figures given by the High Level Safety Review committee headed by Dr.Kakodkar.

	Killed	Injured
(a)    Railway employees	1600	8700
(b)   Passenger/ Public	1019	2110
(c)    Unmanned Level Crossing	723	690

The above position reveals that the Railway employees killed during the period 2007-08 to 2011 were 1600 while those injured on duty were 8700. This figure would convince that the duties of Railway employee cannot be treated as less arduous in comparison with the defence and para-military forces. Like armed forces, Railway employees are expected to remain at their place of posting even during periodic rest and they cannot afford to leave the headquarters and they perform duties under open sky facing inclement weather conditions and ensure running of trains round the clock.

It would therefore, be necessary to exempt Railway employees from the New Pension System (NPS).

2. Need to provide Uniform pension Scheme or One Rank – One Pension to Rail Workforce:

The Railway employees discharges their duties round the clock by shifts and over 85% staff work in remote places where no human life exists. Their duties are safety- oriented. The are facing continuous stress and strain in the course of performing. Train passing duties causing health hazards leading to pre-mature death, medical invalidation at a scale larger than the armed/Par-Military forces. The demand for introduction of Uniform Pension Scheme to Railway employees of the same rank regardless of their date of retirement deserve consideration like that of retiring armed personnel.

I therefore, request you to kindly see that the Government accords approval, exempting Railway employees from the New Pension System for the purpose of covering them under the Liberalized Pension Scheme. I also request that “One Rank – One Pension” Scheme i.e. uniform pension for Railway employees retiring in the same rank regardless of their retirement may kindly be approved by the Government, considering the fact that Railway personnel are serving the nation, transporting military hardware and the army to the borders and ensuring uninterrupted movement of rail transport services at all times round the clock in all weather conditions.

Yours faithfully,

Sd/-

(Dr.M.Raghavaiah)

General Secretary.

Source: NFIR

Employees Provident Fund(EPF) to be Provided two Options

Employees Under the Employees Provident Fund(EPF) to be Provided two Options

The Union Finance Minister Shri Arun Jaitley has announced that with respect to Employees Provident Fund (EPF), the employee needs to be provided two options. Firstly, the employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer’s contribution. He said, with respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA).

The Finance Minister announced that he intends to bring amending legislation in this regard, after stakeholders’ consultation.

Source: www.7thpaycommissionnews.in

New Website of National Pension System Trust Launched

New Website of National Pension System Trust Launched

New Website of National Pension System Trust Launched; To Provide Proper and Effective Information Dissemination to the Stakeholders and Provide Ease of Access to Various Beneficiaries Under NPS

The National Pension System Trust has been set-up and constituted by Pension Fund Regulatory Development Authority (PFRDA) for taking care of the assets and funds under the National Pension System (NPS) in the interest of the beneficiaries (subscribers).

The National Pension System Trust has launched its new website www.npstrust.org.in here today.. The website was launched by Shri G. N. Bajpai, Chairman & Trustee of the Board of NPS Trust. The website is aimed to provide proper and effective information dissemination to the stakeholders and provide ease of access to various beneficiaries under NPS.

www.npstrust.org.in

About NPS Trust

The National Pension System Trust (NPS Trust) was established by PFRDA on27th February, 2008 with the execution of the NPS Trust Deed. The NPS Trust has been set up and constituted for taking care of the assets and funds under the National Pension System (NPS) in the interest of the beneficiaries (subscribers). Individual NPS subscribers shall be the beneficiaries of the NPS Trust. The NPS funds are managed by the Board of Trustees to realize and fulfill the objectives of the NPS Trust in the exclusive interest of the Subscribers.