Number of Subscribers Registered Under National Pension System (NPS) has more than Doubled

Number of Subscribers Registered Under National Pension System (NPS) has more than Doubled

Since April 2012 from about 11.5 Lakh to 23 Lakh: Chairman,Pfrda ;
Number of States Joining NPS has Increased from 12 to 26 ;

Pfrda Working Towards Notification of Various Regulations in Respect of Efficient Management of Funds, Seamless Grievance Handling and Systems for Risk Mitigation and Containment Among Others

Shri Hemant Contractor, Chairman, Pension Fund Regulatory Development Authority (PFRDA) said that the number of subscribers registered under National Pension System (NPS) has more than doubled since April 2012 from about 11.5 Lakh to 23 Lakh. He commended the substantial improvement in performance of State Governments since April 2012.. He said that the Asset Under Management has also increased 7 fold from Rs.3,300 crores to approximately Rs.24,000 crores while the average contribution upload per month has increased from Rs.180 crores to approximately Rs.900 crores. Shri Contractor was speaking at a Conference on Implementation of National Pension System (NPS) by State Governments organized here today by Pension Fund Regulatory Development Authority (PFRDA). The main objective of the Conference was to focus on progress of performance of the State Governments and also to discuss the implications of the passage and notification of the PFRDA Act for respective States who are offering NPS to their respective employees.

Shri Contractor, Chairman, PFRDA informed, that barring the two States, all the other State Governments, have notified joining NPS. Since the last such conference held in April 2012, the number of States joining NPS has increased from 12 to 26, he added. He said that PFRDA was in talks with the other two State Governments on their joining NPS.

Shri Contractor, Chairman, PFRDA, further said that with the passage and notification of the Act, PFRDA has been conferred with a statutory status. Its mandate covers development of the pension sector as also framing regulations for the advancement of the NPS and protection of the interest of the subscribers. He informed the participants that regulations under the Act are expected to be notified within the next two months. The Chairman added that steps have been taken for communicating more frequently with the subscribers to increase awareness levels about NPS. He directed the State Government officials to regularly visit the PFRDA website for updates on various policies and information. Shri Contractor added that there were various points of concerns which have to be dealt with proactively to protect the interest of the subscribers. He added that this conference and more in the coming years would act as a platform for discussion with PFRDA and interactions with other states to share their best practices.

Earlier speaking on the occasion, Dr. Anup Wadhawan, Joint Secretary, Department of Financial Services, Ministry of Finance emphasised upon the fact that NPS of the Central and the State Governments forms the backbone of the NPS as it is a direct replacement of the erstwhile DB pension system. Hence, its proper implementation is very important for the NPS product as well as the sector, he added. Dr. Wadhawan further stressed upon the fact that the State Government Nodal offices need to keep the information in respect of their employees like email ids, mobile numbers and addresses etc. updated in all respects at regular intervals. Dr. Wadhawan further asked the State Governments to sort-out the issue of legacy contributions and inclusion of State Autonomous Bodies in an expeditious manner. He further called upon the State Governments to further the cause of the Government of India promoted NPS Swavalamban scheme for economically weaker sections of the unorganised sector, through their respective Rural Development Departments.

Shri R V Verma, Member (Finance) laid emphasis on the fact that despite NPS being voluntary in nature; most of the State Governments have proactively adopted it. He further dwelt on the fact that the paradigm shift from the Defined Benefit to the Defined Contribution has put the subscriber’s interest at the centre and the involvement of the subscriber’s justify from the entry into the system up to his/her exit becomes prominent. He mentioned that the involvement of the State Government Nodal offices, as the first point of interaction of the subscriber attains importance. He added that with the passage of the Act, PFRDA is working towards notification of various regulations in respect of the efficient management of funds, seamless grievance handling and systems for risk mitigation and containment. Shri Verma emphasised that various issues like expanding coverage, adequately safeguarding the interest of the subscriber and robust risk management system is of paramount important for protecting the interest of subscribers. He said that synchronization of information and funds is very important in NPS; hence Nodal offices have to lay emphasis on the same. He stated that it is the collective endeavour of the Regulator and the stakeholders involved i.e. State Governments, State Autonomous Bodies (SAB) and their Nodal offices, that a two way feedback process has to be in place to innovate upon the operational aspects of the NPS.

Though it is mandatory to register under National Pension System (NPS) for the joinees/employees of the Central Government who have joined or are joining it on or after 01-01-2004, yet most of the State Governments have adopted NPS voluntarily for their employees from their respective adoption dates. Currently, NPS has 76 Lakh subscribers with total Asset Under Management (AUM) of Rs.68,000 crores. Out of this, State Government sector has approx. 23 Lakh subscribers with AUM of Rs.30,000 crores.

Source:PIBNews

GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’

GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’

GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’ – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension

A very popular website among Central Government employees, GConnect, which began functioning more than 8 years ago, continues to be a strong line of communication between the Central Government and its employees.

The article that was published yesterday seeks to answer critics who claim that the new pension scheme is outright bad. GConnect has made it very clear that the opinions expressed in the article belong to its writer, Mr. Dorai, Deputy Director, ESIC Model Hospital and that the website doesn’t necessarily subscribe to them.

The ‘study report,’ that compares the salient features of the old(Central Government Pension Scheme) and new pension schemes, is bound to create controversies.

While various Central Govt employees associations and federations are putting pressure on the Government to withdraw the new pension scheme and enforce the previous one, we believe that this article is going to make a huge impact.

The writer begins the article by stating that those who are opposing the new pension scheme, with more benefits than the old pension scheme, are doing so due to their ignorance. The article also explains how the new pension scheme could create huge wealth.

The report gives as an example, the case of an employee who joins the Central Government employment as a Upper Division Clerk(UDC) in 2014 and retires after 35 years service, in 2049. The report gives a comparative study of how the pension fund grow each of these 35 years. The study also assumes a regular dearness allowance of 6% every six months, and an annual increment of 3%.

The study also assumes that, at an interval of 10 years, the employee gets 3 promotions during his service tenure. Most importantly, it is assumed that matching the employee’s contribution, the Government’s contribution too would witness an 8.7% increase per annum.

At the time of retirement, the employee is likely to get Rs. 2,87,26,201, which is split into two shares – 40% and 60%, which amounts to Rs. 1,14,90,481, and Rs. 1,72,35,720, respectively. 60% of the lumpsum pension wealth is given at the time of retirement. The remaining 40% is invested in an annuity scheme.

It is stated that the monthly pension will be a minimum Rs. 83,306. In addition to this, at the age of 70, the employee gets the remaining 40% back. The article strongly claims that this money could be the gift that the person leaves behind for his future generation.

The article’s highlight feature is the claim that if the Pay Commission recommendations are taken into account, the amount could be much higher and that the UDC could get as much as Rs. 5 crores at the time of retirement.

According to the old Govt pension scheme, the employee’s monthly pension amount would be Rs. 1,00,934, and after his demise, his spouse would get Rs. 10,317 plus Dearness Allowance. After his/her death, there are no more benefits for the family.

The article is indirectly stating that the absence of gratuity and other such benefits is not a huge issue. According to the old Govt pension scheme, at the time of retirement, the employee would make only Rs. 38,32,550, which is Gratuity (16.5 months) + EL Encashment + Commutation.

While discussing the General Provident Fund (GPF), the article assumes that since nobody leaves anything much in this fund, its overall impact on the total pension fund would be minimal.

The writer concludes his article by declaring that those who oppose the new pension scheme lack intelligence.

Source: 7thpaycommissionnews.in

Eligibility of Old Pension Scheme to Substitutes who attained temporary status prior to 01.01.2004 – Railway Board clarification order

Applicability of Old Pension Scheme to Substitutes who attained temporary status prior to 01.01.2004 but regularized after 01.01.2004 – clarification regarding.

RBE No, 121/2014

GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS (RAIL MANTRALAYA)
(RAILWAY BOARD)

No. 2012/F(E)III/1(1)/2

New Delhi, Dated: 29.10.2014.

The GMs/FA&CA0s,
All Indian Rauways/Production Units.
(As per mailing list)

Subject: Applicability of Old Pension Scheme to Substitutes who attained temporary status prior to 01.01.2004 but regularized after 01.01.2004 – clarification regarding.

The issue of coverage of substitutes who had attained temporary status prior to 01.01.2004 but regularized after 01.01.2004 under Old Pension Scheme, has been raised by both the recognized Federations (AIRF & NFIR) under PNM/AIRF item No.05/2012 and PNM/NFIR item No.15/2011 respectively. The issue has also been raised under DC/JCM (Railways) item No.20/2012.

2. The issue has been examined by Board and it has now been decided that substitutes who got temporary status prior to 01.01.2004 but regularized/absorbed after 01.01.2004 and after regularization, if the date of appointment is prior to 01.01.2004, in terms of provision of Board’s letter No.E(NG)ll/90/SB/Master Circular dated 29.01.1991(M.C. No.20/91) and para 6 of letter No.E(NG)11/2008/SB/SR/15 dated 17.09.2010, then they may be covered under Old Pension Scheme.

3. Further, the employee and employer contribution of the NPS corpus of the Substitutes, mentioned in para 2 above, who so far have been covered under the National Pension System (NPS) may be adjusted in terms of the instructions contained in Board’s letter No.2010/AC-II/21/18 dated 31.03.2014(RBA No.5/2014)

Please acknowledge receipt

(Amitabh Joshi)
Deputy Director Finance (Estt.)III
Railway Board
Deputy Director Finance Esft.)III
Railway Board.

Source: AIRF

Tax exemption for withdrawals under the National Pension System (NPS)

PFRDA will soon approach Finance Ministry seeking tax exemption for withdrawals under the National Pension System (NPS),

Pension regulator to pitch for tax break on NPS withdrawals

Pension regulator PFRDA will soon approach Finance Ministry seeking tax exemption for withdrawals under the National Pension System (NPS), its Chairman Hemant G Contractor has said.

This will be the first time PFRDA – after getting statutory recognition in February 2014 – will seek a tax break for NPS.

The Finance Ministry will soon start the budget preparation exercise for Budget 2015-16, which will be the first comprehensive budget of the new Modi-Government.

Prior to the statutory recognition, the interim pension regulator had sought tax exemption on NPS withdrawals, but that tax break was not provided by the erstwhile UPA Government.

In his first interaction with mediapersons here on Wednesday, the new PFRDA Chairman, Contractor said there was need for some “fiscal” push from the Government to make NPS popular in the country.

A tax exemption on NPS withdrawals would address the “adequacy” aspect of retirement monies and ensure that taxes don’t eat into the retirement corpus of a subscriber.

Under the current income tax law, there is no tax incidence on contribution or accumulation phase, but tax would be levied at the withdrawal stage

A tax exemption on NPS withdrawals would level the playing field with products such as provident funds.

The direct taxes code proposed by the UPA regime had suggested that ‘Exempt-Exempt-Exempt’ regime be adopted for financial savings products like NPS.

Indications are that the new dispensation at the Centre will look to bring its own version of new income-tax law.

SWAVALAMBAN

PFRDA Chairman Contractor said the Swavalamban scheme has been made an integral part of the Pradhan Mantri Jan Dhan Yojana (PMJDY), the flagship financial programme of the Modi-led Government.

PFRDA has fixed a target of fifty five lakhs subscribers of Swavalamban under PMJDY.

This target of fifty five lakhs subscribers has been allocated to all the banks working as aggregators. Targets have also been allocated to other categories of aggregators.

Source: www.thehindubusinessline.com

Additional Benefits on death/disability of Government servant covered by NPS

PFRDA, FINANCE MINISTRY AND RAILWAY BOARD ORDERS ON ADDITIONAL BENEFITS ON DEATH / DISABILITY OF GOVERNMENT SERVANTS COVERED BY NATIONAL PENSION SYSTEM…

Additional benefit on death/disability of Government Servants covered by New Pension Scheme – Clarification regarding RBE 96/2014

RBE No.96/2014

GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS (RAIL MANTRALAYA)
(RAILWAY BOARD)

No. 2012/F(E)III/1(1)/4

New Delhi, Dated 8.9.2014

The GMs/FA&CAOs,
All Indian Railways/Production Units/RDSO.
(As per mailing list)

Subject: Additional benefit on death/disability of Government servant covered by New Pension System- clarification regarding.

A copy each of the Ministry of Finance, Department of Financial Services O.M.No.11/23/2013-PR dated 21.05.2014 and the Pension Fund Regulatory and Development Authority (PFRDA)’s letter No.PFRDA/24/FXIT/10 dated 22.08.2014 is enclosed for information and compliance. These instructions shall apply mutatis mutandis on the Railways also.

2. The Department of Pension & Pensioners’ Welfare (DOP&PW)’s O.M. dated 05.05.2009 and the PFRDA’s circular No.PFRDA/2013/2/PDEX/2 dated 22.01.2013 mentioned in the Ministry of Finance’s O.M dated 21.05.2014 were circulated to the Zonal Railways vide Board’s letter No. 2008/AC-II/21/19 dated 29.05.2009 and letter No. 2010/AC-II/21/18 dated 02.07.2013 respectively.

3. Please acknowledge receipt.

(Amitabh Joshi)
Deputy Director Finance (Estt.)III,
Railway Board.

Finance Ministry Orders :

Additional benefits on death/ disability of Government servant covered by National Pension System (NPS) – Clarifciation –reg.

No.11/23/2013-PR
Government of India
Ministry of Finance
Department of Financial Services

Jeevan Deep Building, Parliament Street,
New Delhi, dated 21st May, 2014

Office Memorandum

Subject: Additional benefits on death/ disability of Government servant covered by National Pension System (NPS) – Clarifciation –reg.

The undersigned is directed to refer to Railway Board, Ministry of Railways OM No. 2012/F(E)III/1/4 dated 14th January 2013 on the subject above and to say that the comments of this Department on the Ministry of Railways’ reservations as under Para 3 of above OM, are as under:

“The PFRDA’s clarification that the benefits granted vide the Department of Pension & Pensioners’ Welfare (DPPW) O.M. dated 05.05.2009 are over and above the benefits admissible under National Pension System (NPS), needs to be modified to the extent that the employee or the legal heirs of the employees, who wish to opt for pension or family pension as per the DPPW order, can not avail of two pension related benefits under the NPS and CCS (Pension) Rules, 1972 simultaneously.”

2. For any further clarification on the DPPW OM dated 05th May 2009, Ministry of Railways may kindly get in touch with the DPPW itself.

3. This issues with approval of Joint Secretary, Department of Financial services, Ministry of Finance.

(Surinder Kaur)
Under Secretary to the Government of India

Orders issued by PFRDA :

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
1st Floor, ICADR Building, Plot No. 6,
Vasant Kunj Institutional Area,
Phase – II, New Delhi – 110070

VENKATESWARLU PERI
General Manager

PFRDA/24/EXIT/10

22nd Aug, 2014

Mr. Amitabh Joshi
Deputy Director Finance (Estt.)III,
Railway Board,
Ministry of Railways,
Rail Bhawan, New Delhi-01

Subject: Additional Benefits on death/disability of Government servant covered by NPS

Dear Sir,

This has reference letter No. 2012/F-E/ (III)/1/14 dt. 30th June, reference the OM No. 11.23/2013 dt. 21st May, 2013 with respect to Railway Board, Ministry of Railways OM No. 2012/F(E)III/1/4 dated 14th January 2013 on the subject cited above.

In this regard, we wish to inform you that we have included the same in our proposed Exit Regulations and which shall ensure that in case if the government or government authority or entity registered as government sector (as employer) under the NPS with the central record keeping agency (CRA) provides any additional relief or benefit to the family members of a deceased NPS subscriber/subscriber due to any ground like invalidation leading to loss of employment in lieu of the benefits available under National Pension System, the claimants to the accumulated pension wealth of the deceased subscriber/subscriber would be free to avail such benefits subject to the condition that they specifically agree and undertake to transfer the accumulated pension wealth to the Government dept unconditionally’.

We have already provided this information to Department of Financial Services (DFS), vide letter no. PFRDA/24/10/E-82, dt. 1st July 2014, copy of which is enclosed herewith for your information.

Yours faithfully,
sd/-
Venkateswarlu Peri

Source: NFIR