NPS Update: Issue of getting nominal pension under NPS raised in Parliament, government told the formula to get more pension

NPS Update: Issue of getting nominal pension under NPS raised in Parliament, government told the formula to get more pension

National Pension System: In recent times, there have been many complaints that the state government employees retiring under NPS are getting very nominal pension which is insufficient for their livelihood. Due to this, government employees demand Old Pension Scheme and have recently staged a protest at Ramlila Maidan in Delhi regarding their demand. But now the echo of this is being heard in the Parliament also. The Central Government has given clarification on why the state government employees who have opted for the National Pension System get a monthly pension of only Rs 1,000 to Rs 2,000 after retirement. The government said in Parliament that these employees can invest 100 percent of the corpus they get after retirement in annuity plans so that they can get more pension. 

Small pension available under NPS

Lok Sabha MP Kalanidhi Veeraswamy asked the Finance Minister during Question Hour, whether the Central Government has taken cognizance of the fact that in some states the state government employees who have retired under NPS are getting only Rs 1000, Rs 1500 and Rs 2000. Are they getting monthly pension which is insufficient to meet their daily expenses? Answering this question, Minister of State for Finance Bhagwat Karad said, the return on contribution to NPS under the Pension Fund PFRDA Act 2013 is based on the market. Keeping in mind the interests of the subscribers contributing under NPS, pension fund managers invest the money contributed for pension under due diligence which is regulated by PFRDA. He said that as per the investment guidelines of PFRDA, the corpus made up of total NPS contributions grows with compounding effect. 

Government told the formula to get more pension

The Minister of State for Finance said that the total amount earned after the employees exit NPS after retirement is tax free. Out of the total amount deposited as pension fund, 60 percent of the amount is given to the employee in lump sum and the remaining 40 percent of the pension amount is invested in an annuity plan on which the amount received is given as pension every month till retirement. After that the employee keeps getting it. He said that if the employee wants more pension, he can invest 100 percent of the corpus received after retirement by purchasing an annuity plan. 

Pension depends on these things 

Bhagwat Karad said, the corpus from which subscribers buy annuity on which pension is fixed for a period depends on many things. In which the monthly contribution to NPS during service, the period of contribution, the period for which the subscribers remain invested, the investment pattern and if any partial withdrawal has been made during the service, then the pension received also depends on this. The Minister of State for Finance said, in the year 2019, the Central Government gave freedom to the central employees to choose the pension fund and investment pattern so that they can get higher returns on their investments and get more pension.  

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