National Pension System: The government employees who take retirement prior to the age of superannuation, not completing the minimum number of 20 years of service requirement, can also avail of the benefits of new National Pension System (NPS), launched in January 2004 for government employees, later opened to all. Under NPS, there is a provision for voluntary retirement/exit prior to the age of superannuation, without linking it with the minimum number of 20 years of service, said a statement from Ministry of Finance.
Under the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2015; the subscriber who, before attaining the age of superannuation prescribed by the service rules applicable to him or her, voluntarily retires or exits, their at least eighty percent out of the accumulated pension wealth are mandatorily utilised for purchase of annuity and the balance of the accumulated pension wealth be paid to the subscriber in lump sum, it said. The subscribers have a choice to collect the remaining pension wealth in accordance with the other options specified by the Authority from time to time.
The benefit of retirement gratuity and death gratuity has been extended to the government employees covered under NPS on the same terms and conditions as are applicable under CCS (Pension) Rules, 1972, the statement said.
The mandatory contribution by the central government for its employees covered under NPS Tier-I has been enhanced from the existing 10 percent of the basic pay +DA to 14 percent of basic pay + DA from January 31, 2019. The employees’ contribution rate would remain at the existing 10 percent of basic pay + DA. There is no proposal to increase the contribution to 20 percent from 14 percent under NPS.
Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs, gave this information in a written reply to a question in Rajya Sabha today.