ew Pension Bill, PFRDA Bill, 2011: Frequently Asked Question (FAQ)

 1. What does the new pension law do?

•   The PFRDA Bill, 2011, (proposed to be enacted as a law) provides for the establishment of an Authority to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.
  An Interim Authority has already been created vide Govt Resolution dated October 10, 2003, and November 14, 2008, and is fully functional. The passage of the bill will confer statutory status to the Interim PFRDA to develop and regulate National Pension System (NPS) earlier known as New Pension Scheme.

2. What is NPS ?

•   The National Pension System reflects (NPS) Government’s effort to find sustainable solutions to the problem of providing adequate retirement income.
• The NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account and also his employer can also co-contribute for the social security/welfare of the individual.
• The NPS is designed on Defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.
• Eventual pension wealth is based on the level of contributions made over the years, the charges (administrative and fund management) deducted from the funds and the returns achieved by the investment fund (pension fund managers) used over a period of time during the accumulation phase in the NPS.
• The greater the value of the contributions made, the greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, the larger would be the eventual benefit of the accumulated pension wealth likely to be.

3. Why should one subscribe to a pension fund?

•   Pension ensures that a person has steady and adequate financial security during his old age, even after he has retired from employment or his earning capacity has extinguished/decreased.

4. What does the pension bill propose?

•   The PFRDA shall administer the NPS for subscriber’s interest in accordance with the provisions of the PFRDA Act and the rules and regulations framed thereunder. The Authority has the mandate to regulate all other pension funds (other than the NPS) which are not regulated by any other enactment.

5. Is it compulsory?

•   The NPS is compulsory in respect of persons appointed to public services in connection with the affairs of the Union, or to All-India Services, on or after 1-1-2004. It is also compulsory in case of employees of Central Autonomous bodies.
• The NPS is also applicable in respect of employees of various state governments and its autonomous bodies, who have joined the NPS and in respect of whom, such state governments have extended the NPS based on the notifications issued by such states.
• The NPS is voluntarily extended to the citizens of India w.e.f May, 2009, who may choose to be covered under the NPS. The NPS has also been extended to various corporates, who may choose to provide the scheme to their employees on a voluntary basis.

6. When was it first introduced?

•   The PFRDA Bill 2005 was introduced in Lok Sabha in March, 2005, but could not be considered and passed due to dissolution of 14th Lok Sabha. Earlier, the PFRDA Ordinance 2004 was promulgated on December 29, 2004, which lapsed on April 7, 2005.

7. Can one decide how much on ones savings should go into stocks and how much in debt?

•   Presently, in respect of government employees, the investment choice in asset class E (Equities), asset Class C (Corporate Debts) and Asset Class G (Government Securities) is in accordance with investment pattern contained in Ministry of Finance notification No. F. No. 5 (88)/2006 –PR.— dated August14,  2008. For others different schemes are applicable based on the choice exercised by the subscriber.

8. If stock prices crash, will pension be affected?

•   The rate of return and NAV (Net Asset Value) of the subscriber will be susceptible to market risk.

9. Can one choose the stocks in which pension fund will put the money?

•   Pension Fund Managers based on their expertise will choose the stocks for investing the collective monies of the subscriber (under full disclosure to the NPS Trust). However, individual subscriber will not have the option of choosing a particular stock.

10. Can one withdraw money whenever one wants or only after one retires?

•   The subscriber can exit from the NPS and withdraw the accumulated pension wealth in the following manner and no other exits or withdrawals are permitted presently:
• a. Upon attainment of age of 60 years   : At least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.
• b. Upon Death (irrespective of cause)   : The entire accumulated pension wealth (100%) would be paid to the nominee / legal heir of the subscriber and there would not be any purchase of annuity/monthly pension.
• c. Exit from the NPS before attainment of age of 60 years (irrespective of cause):   At least 80% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.

11. Can it help the industry?

•   The industry can benefit by the availability of long term funds under the NPS, which may be deployed to build infrastructure. The industry can also provide the  NPS as an important social security scheme to the employees serving in such industries.

Source: http://english.manoramaonline.com
via : http://karnmk.blogspot.in/

Temporary Employees joined before Jan, 2004 and regularised in NPS will eligible for Pension & GPF: CAT

Ce­­n­tral Administrative Tri­bunal relief on pension for 16 In­di­ra Gandhi Centre for Ato­mic Research employees

Chennai: The Madras bench of the Ce­­n­tral Administrative Tri­bunal has directed the In­di­ra Gandhi Centre for Ato­mic Research (IGCAR), Kal­pakkam, to provide GPF and other benefits under Central civil service (pension) rules 1972 to 16 employees absorbed as temporary workers in 1999.

In a petition, K. Punni­yakoti of Kalpakkam and 15 others prayed for a direction to the Central government and IGCAR to extend to them the benefit of pension under the old government pension scheme.

The petitioners contended that they were granted temporary status in 1999. On September 9, 2008, they were appointed as casual labourers in the grade of ‘helper A’.

As per the order, 50 per cent of the service rendered under temporary status would be counted for retirement benefits.

After rendering three years of continuous service after conferment of temporary status, the casual labourers would be treated on a par with group D employees for the purpose of contribution to general provident fund.

They were appointed in temporary category and subsequently regularised between May 2005 and November 2005.

Meanwhile, the government introduced the new pension scheme in Ap­ril 2004 and the employees who joined service after January 1, 2004 were to be be covered under the new scheme.

In its reply, IGCAR argued that the employees who joined service after January 1, 2004 would be governed by the new pension scheme.

Employees who joined service prior to January 1, 2004 were governed by the general provident fund /contributory provident fund as per the Central civil service (pension) rules 1972.

The judicial member of the bench, B. Venkateswara Rao directed IGCAR to apply provisions of the Central civil service (pension) rules 1972 in respect of the employees and extend benefit under GPF rules. The bench also directed IGCAR to deduct monthly subscription regularly without interruption. The order is to be complied with within two months.

Source : http://www.deccanchronicle.com

Merger Of 50% DA With Pay : Resolution adopted in INTUC Conference

Merger Of 50% DA With Pay

The 30th Plenary Session of Indian National Trade Union Congress INTUC is being held in Raipur from 6-9-2013 to 9-9-2013 is concluded today. There are 4 Resolutions which are considered to be very important are adopted in this Conference.One of the four main resolution is Merger of 50% DA with Pay for central government employees. So the INTUC urges the central government to consider the demand and accord sanction for merging 50% DA with pay. The Resolution On Merger Of 50% DA With Pay which has been adopted in 30th Plenary Session of INTUC held in Raipur from 6-9-2013 to 9-9-2013 is given below

Resolution On Merger Of 50% DA With Pay

The Wage structure revision for Central Government employees had been enquired into by the successive pay Commission appointed by the Government of India during the past decades and gave their reports. The Government had considered the reports and decided for implementation with certain changes and improvements.

The previous pay Commissions (3rd,4th,5thand 6th ) have ,by and large, covered the aspects of the principle of wage determination . But however the job contents, remuneration commensuration with the nature of duties and responsibilities have not been taken into consideration by the pay Commissions while determining the revised pay structure, consequently the railway men have been put into disadvantage.

The 5th CPC had recommended that the DA must be merged with pay and treated as pay for computing all allowance as and when the percentage of dearness compensation exceeds 50%. Accordingly even before the setting up of 6th CPC, the DA of 50% was merged with pay.

Presently, the dearness compensation is 80% as on 1st January, 2013, while the DA had crossed 50% of pay as on 1st January, 2011.The demand for merger of DA to partially compensate the erosion in the real wages was first mooted by the Gadgil Committee in the 2nd pay Commission period. The 3rd CPC had recommended such merger when the cost of living Index crosses over 272 points i.e. 72 points over and above the base index adopted for the pay revision. In other words, the recommendation of the 3rd CPC was to merge the DA when it crossed 36%. The Government in the national Council JCM at the time of negotiation had initially agreed to merge 60% DA and later the whole of the DA before the 4th CPC was set up. The 5th CPC had merged 98%of DA with pay.

As the DA already stood at 80% of Pay and another installment is expected to be granted w.e.f. July, 2013 which may cross 90%,it is necessary that the Government takes steps to merge 50%DA with pay for all purposes for the year 2013 for ensuring compensation to the erosion of value of real wage of government employees.

The Plenary Session of INTUC therefore urges upon the Government of India to consider the demand and accord sanction for merging DA component i.e. 50% of DA with pay for all purposes.

Source : http://www.gservants.com/

ENHANCEMENT OF CASH CONVEYANCE LIMITS - DRAFT PROPOSAL BY DoP

PFRDA is a reality now, will the real NPS follow?

At long last, after close to a decade of waiting in the Pension Fund Regulatory and Development Authority Bill (PFRDA) has been passed by Parliament. With this, the PFRDA gets statutory status. As far as the operation of the National Pension System (NPS) goes, this Bill doesn't change anything on the ground. The PFRDA has been in operation since 2003 and the NPS has come into existence during this time in bits and pieces.

The NPS has descended from thinking that began in the late 90s on creating a modern broad-based pension system for India. The progenitor of NPS was a report by a committee called the Old Age Social and Income Security Project set up by the Ministry of Social Justice in 1998 and headed by the first Sebi chairman, SA Dave. The two obvious drivers of the whole process were changing demographics and the large future liability that the central and state governments face in the old pension system.

That report was a remarkable achievement, more so for the time. It didn't just lay down the outline of what India's ideal pension system should be, but created a detailed blueprint of the system, from the capabilities that would be required from the information-handling back-end to the principles of investment management that should be followed and the way the scheme would be promoted and expanded to the unorganised sector. The report envisaged individual retirement accounts and account holders choosing between different 'styles' of investment schemes run by a set of pension fund managers. At the same time, it designed a framework within which extremely low-cost operations would be possible.

The recognition of equity as a desirable asset type for retirement savings and the emphasis on passive fund management for the same were huge steps forward. Today, as the PFRDA is about to get going, there are two ways of looking at things. If one remembers everything that the OASIS report contained and compares that to what has actually been achieved in the 14 long years (close to half the working life of the potential beneficiary!) that have gone past, then it's hard not feel a little depressed.

Back in 2003, when the PFRDA was first constituted, I wrote a long and enthusiastic cover story about the coming NPS revolution in Value Research's magazine. Yesterday, when I took out that story and re-read it, it really brought home the fact that NPS was yet to be created. In many key areas, NPS as it exists is not much more than a caricature of what had been recommended. In fund management, there is one single style, which has a token neither-here-nor-there 7 per cent equity assets. Some great ideas about fund managers competing with each other — and paying penalties for under performing in the 'safe' style — are thus rendered moot.

However, in the specific task of replacing the government's old pension system and thus limiting its future liability, NPS has obviously served its purpose. To make this part functioning, IT back-end has evidently been created and works. The NPS's hardest challenge is its extension beyond government employees and to the unorganised sector. Anyhow, whatever be the delays and the gaps, PFRDA and NPS now exist and will presumably move forward one way or the other.

The larger a proportion of the original OASIS vision it manages to implement, the better it will be. One potential pitfall is the nature of the PFRDA Bill. Like most Indian laws setting up regulators, this one, too, hands over the all rule-making to the regulator. Few of the desirable characteristics of the NPS are thus actually embedded in the law. Basically, the bill creates PFRDA and PFRDA creates and continues to nurture and grow a great pension system for all time to come. Hopefully.

Source : http://economictimes.indiatimes.com

Hon'ble Prime Minister releases stamp on Lala Jagat Narain

CEPT- MYSORE Hosting New web site http://cept.gov.in for all Dept. Technological issues:-

Vide .No.CEPT-1/2012 dated at Mysore 570 010 the 9-9-2013. The CEPT is hosting its official web site at http://cept.gov.in. The information that is being hosted on http://ptcinfo.org will be hosted henceforth on http://cept.gov.in. In future the website http://ptcinfo.org will contain information relating to the activities of Postal Training Center, Mysore only. All the information relating to the Technology, software, training modules, various MIS pages etc. will be available in future on http://cept.gov.in only.

Note:
You need to be a registered user to access this site. If you have registered with sahuliyat then use the same email ID or reset password