GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
RAJYA SABHA
UN STARRED QUESTION NO. 2130
TO BE ANSWERED ON MARCH 21, 2017/PHALGUNA 30, 1938 (SAKA)
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
RAJYA SABHA
UN STARRED QUESTION NO. 2130
TO BE ANSWERED ON MARCH 21, 2017/PHALGUNA 30, 1938 (SAKA)
RESTORATION OF OLD PENSION SYSTEM IN PLACE OF CONTRIBUTORY PENSION SYSTEM
2130. Shri T. G. Venkatesh
Will the Minister of FINANCE be pleased to state:
(a) whether it is a fact that the newly
introduced Contributory Pension System is not beneficial to the
employees and so the employees unions are requesting Government to
re-introduce the old pension system in its place, if so, the details
thereof; and
(b) whether any representation has been
received in this regard by Government, if so, the details thereof and
the stand of Government in this regard?
ANSWER
The Minister of State in the Ministry of Finance
(Shri Santosh Kumar Gangwar)
(Shri Santosh Kumar Gangwar)
(a) & (b) National Pension System
(NPS), which is a contributory pension system, has, inter alia, the
following features which benefit the employees:
• NPS is a well designed pension system managed
through an unbundled architecture involving intermediaries appointed by
the Pension Fund Regulatory and Development Authority (PFRDA) viz.
Pension Funds, Custodian, Central Recordkeeping and Accounting Agency,
National Pension System Trust, Trustee Bank, Points of Presence and
Annuity Service Providers. It is prudently regulated by PFRDA which is a
statutory regulatory body established to promote old age income
security and to protect the interests of subscribers of NPS.
• Dual benefit of Low Cost and Power of Compounding–
The pension wealth which accumulates over a period of time till
retirement grows with a compounding effect. The all-in-costs of the
institutional architecture of NPS are among the lowest in the world.
• Tax Benefits– Tax benefits are available to the NPS subscribers under various provisions of the Income- tax Act, 1961.
• Transparency and Portability is
ensured through online access of the pension account by the NPS
subscribers, across all geographical locations and portability of
employments.
• Partial withdrawal–
Subscribers can withdraw up to 25% of their own contributions towards
their pension account, before attaining superannuation age for certain
specified purposes subject to certain conditions.
Representations have been received from
certain quarters regarding the implementation of NPS which, inter alia,
include the demand that NPS may be scrapped and the Government may
revert to old defined benefit pension system. However, there is no
proposal to replace the NPS with old pension scheme in respect of
Central Government employees recruited on or after 01.01.2004.
Source: RAJYA SABHA
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