A detailed reply is given
NPS: This is applicable to all new recruitees joining on or after 01-01-2004.
Rate of Contribution : 14% at present. Eartlier it was 10% and now stands revised to 14%
Investments: The contributions of the employer and the employees are invested by the Pension fund Managers. There are several options of investment specified in this regard
Retirement benefits: The accumulated contributions over the service period is to be paid in the form of Annuity. The Accumulated contributions are linked to the Market The Annuity is provided by the Annuity service providers. These are registered with Pension Fund Regulatory and Development Authority.
Under National Pension Scheme , the annuity payable remain fixed and the retired employee has to live with the same amount for the rest of his/her life.
Unified Pension Scheme: This scheme was announced by the Central Government and the rules have been notified with effect from 01st April 2025. The major modification of the scheme announced by the Central Government is that the returns are not now linked to pension . The pension that is payable to a retired employee will be based on his average salary drawn for the last 12 months. The monthly pension will be 50% of such average pay plus Dearness relief.
The improvements in the unified pension scheme are the following
- There is a monthly pension which is not linked to Market and hence insulated from Market Risk
- There is Dearness relief payable on such pension.
Trust that I have presented the things in a clear manner