The proposed scheme would guarantee a pension of 40-50 per cent of the last pay, with adjustments.
Pension Benefits: There’s some good news for central government employees.
The newly formed BJP-led NDA government will be offering a substantial enhancement to the pension benefits for central government employees under the National Pension System (NPS), reported the Financial Express.
The proposal under the NPS guarantees up to 50 per cent of the last basic pay as a pension, a big shift from the current market-based returns system.
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TV Somanathan Committee
The previous NDA government led by Narendra Modi established a committee in March 2023 led by Finance Secretary TV Somanathan to search for ways to improve pension benefits under NPS without going back to the non-contributory Old Pension System (OPS).
The OPS has been deemed fiscally unsustainable.
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The TV Somanathan Pension Scheme Committee included Radha Chauhan, special secretary in the Finance Ministry’s Expenditure Department; Annie Matthew, and Deepak Mohanty, chairman of the Pension Fund Regulatory and Development Authority.
The committee submitted the report in May, aligning closely with the Andhra Pradesh NPS model introduced in 2023.
More Than 8.7 Million Govt Employees To Benefit
The proposed scheme would guarantee a pension of 40-50 per cent of the last pay, with adjustments based on years of service and any withdrawals from the pension corpus. Any shortfall in the pension corpus required to meet the guaranteed pension amount would be covered by the central government’s budget.
If implemented, this could benefit around 8.7 million central and state government employees, who have been enrolled in the NPS since 2004.
