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

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


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

RBE No.96/2014


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.

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 :

1st Floor, ICADR Building, Plot No. 6,
Vasant Kunj Institutional Area,
Phase – II, New Delhi – 110070

General Manager


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,
Venkateswarlu Peri

Source: NFIR

New website for PFRDA

New website for PFRDA

Finance Minister launches New Website of PFRDA on 26th August, 2014.

PFRDA was established by Government of India on 23rd August, 2003. The Government has, through an executive order dated 10th october 2003, mandated PFRDA to act as a regulator for the pension sector. The mandate of PFRDA is development and regulation of pension sector in India.

The National Pension System reflects Government’s effort to find sustainable solutions to the problem of providing adequate retirement income. As a first step towards instituting pensionary reforms, Government of India moved from a defined benefit pension to a defined contribution based pension system by making it mandatory for its new recruits (except armed forces) with effect from 1st January, 2004. Since 1st April, 2008, the pension contributions of Central Government employees covered by the National Pension System (NPS) are being invested by professional Pension Fund Managers in line with investment guidelines of Government applicable to non-Government Provident Funds.

Vision & Mission Statement of PFRDA

Vision & Mission Statement of PFRDA

Mission Statement
“To establish and promote pension system for all citizens through guided development and prudent regulation of the pension industry, with focus on institution-building, capacity development and enabling framework for innovations in products, schemes and programmes across all stakeholders and market participants, in the best interest of the subscribers and the pension system”

Vision Statement
“To be a model Regulator for promotion and development of an organized pension system to serve the old age income needs of people on a sustainable basis”

Application Forms for Commutation : CCS (CP) Second Amendment Rules, 2014

Application Forms for Commutation: CCS(CP) Second Amendment Rules, 2014

(Department of Pension and Pensioners’ Welfare)


New Delhi, the 26th May, 2014

G.S.R. 355(E).- In exercise of the powers conferred by the proviso to article 309 and clause (5) of article 148 of the Constitution and after consultation with the Comptroller and Auditor General of India in relation to persons serving in the Indian Audit and Accounts Department, the President hereby makes the following rules further to amend the Central Civil Services (Commutation of Pension) Rules, 1981, namely :-

1. (1) These rules may be called the Central Civil Services (Commutation of Pension) New-Pension-System Second Amendment Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

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