GOVERNMENT OF INDIA
MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS
(DEPARTMENT OF PENSION & PENSIONERS’ WELFARE)

RAJYA SABHA
UNSTARRED QUESTION NO. 1888
(TO BE ANSWERED ON 16.03.2023)

DEMANDS FOR REVERTING TO OLD PENSION SCHEME

1888 SHRI DEEPENDER SINGH HOODA:
Will the PRIME MINISTER be pleased to state:

(a) whether Government has received representations from various Unions/ Associations of Central Government Employees from all across the country to discontinue the New Pension Scheme (NPS) and implement the Old Pension Scheme (OPS);

(b) if so, the action taken by Government to meet their demands;

(c) whether Government is considering to revert to the Old Pension Scheme (OPS); and

(d) if so, the details thereof and if not, the reasons therefor?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS AND MINISTER OF STATE IN THE PRIME MINISTER’S OFFICE (DR. JITENDRA SINGH)

(a) to (d): Representations have been received from time to time offering inputs on different aspects of National Pension System.

The National Pension System (NPS) was introduced for Central Government employees vide Ministry of Finance (Department of Economic Affairs) Notification No. 5/7/2003-ECB & PR dated 22.12.2003 for all new recruits joining the Central Government service (except armed forces) from 01.01.2004.

On introduction of the National Pension System, the Central Civil Services (Pension) Rules, 1972 were amended. Accordingly, the benefits of old pension scheme under the Central Civil Services (Pension) Rules, 1972 are not admissible to the Central Government civil employees appointed on or after 01.01.2004, under the amended rules.

Government of India has taken many steps for streamlining of NPS for Central Government employees and to protect the interest of the subscribers. These include enhancement of Government’s contribution from the earlier 10% of Pay plus DA to 14% of Pay plus DA, freedom of choice of selection of Pension Funds and pattern of investment to subscribers, payment of compensation for non-deposit or delayed deposit of NPS contributions for any period during 2004-2012, tax exemption under Section 80C of the Income Tax Act, 1961 and increase in tax exemption limit for lump sum withdrawal on exit from earlier 40% to 60% of the amount due, making the entire withdrawal exempt from income tax, framing of Central Civil Services (Implementation of National Pension System) Rules, 2021 and setting up of an oversight mechanism in Ministries/Departments for implementation of NPS

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PFRDA permitted now Overseas Citizen of India to enroll in NPS at par with Non-Resident Indians

30 OCT 2019

Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enroll in National Pension Scheme (NPS) at par with Non-Resident Indians vide Circular No: PFRDA/2019/19/PDES/3 dated 29th October 2019. The Government vide notification S.O. 3732(E) dated 17th October, 2019 on Foreign Exchange Management (Non-debt Instruments) Rules, 2019 of Dept. of Economic Affairs, has specified that an OCI may subscribe to the National Pension System governed and administered by PFRDA, provided such person is eligible to invest as per the provisions of the PFRDA Act and the annuity/accumulated saving will be repatriable, subject to FEMA guidelines.

Contributions made towards NPS are eligible for an additional tax deduction under section 80CCD(1B) upto Rs. 50,000 which is over and above the Rs 1,50,000 limit of deduction available under sec 80CCD(1). In the Union Budget 2019, the tax exemption limit for lumpsum withdrawal on exit/maturity from NPS has been increased from the present 40% to 60% under section 10(12A) of the IT Act and the remaining 40% of the corpus is already tax-exempt as it is mandatorily utilized for annuity purchase.

About PFRDA:

Pension Fund Regulatory and Development Authority (PFRDA) is the statutory Authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of the National Pension System (NPS) and pension schemes to which this Act applies. NPS was initially notified for central government employees joining service on or after 1st Jan 2004 and subsequently adopted by almost all State Governments for its employees. NPS was extended to all citizens of Indian on voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.

As on 26th October 2019, the total number of subscribers under NPS and Atal Pension Yojana has crossed 3.18 crores and the Asset under Management (AUM) has grown to Rs. 3,79,758 crores. More than 66 lakhs government employees have been enrolled under NPS and 19.2 lakhs subscribers have subscribed to NPS in the private sector with 6,812 entities registered as corporates.

PFRDA in its endeavor to promote and develop NPS has taken several initiatives towards increasing the pension coverage in the country. Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.

Source – PIB

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No.1(21)/EV/2018
Government of India
Ministry of Finance
Department of Expenditure
(E-V Branch)

North Block, New Delhi
the 12th April, 2019

Subject: Compensation for non-deposit or delayed deposit of contribution under National Pension System during 2004-12

The undersigned is directed to invite attention to the guidelines issued by Controller General of Accounts, Ministry of Finance, Department of
Expenditure, vide OM No.1(7)/2003/TA/Part file/279 , dated 02.09.2008 for streamlining of procedure for remittances of contributions under the
National Pension System (NPS) by PAOs/CDDOs and NCDDOs which provides, inter-alia, the detailed procedure for t he purpose of crediting of the NPS contribution to the NPS Trustee Banks so as to ensure that the contribution is credited to the NPS regulatory system as per the timelines prescribed therein without delay.

2. Based on the recommendations of the 7th Central Pay Commission and the recommendations of a Committee of Secretaries, as set up in pursuance of the decision of the Government contained in para 15 of the Resolution of this Department bearing No. 1-2/2016-IC dt. 25.7.2016 to suggest measures for streamlining the implementation of the NPS, the Department of Financial Services, Ministry of Finance, has issued a Notification F. No. 1/3/2016-PR dt. 31.1.2019, clause 1(2)(x), 1(2)(xi) and 1(2)(xii) thereof provides as under:

Compensation for non-deposit or delayed deposit of contribution under National Pension System during 2004-12

(a) In a ll cases. where the NPS contributions were deducted from the salary of the Government employee but the amount was not remitted to CRA system or was remitted late, the amount may be credited to the NPS account of the employee along with interest for the period from the date on which the deductions were made till the date the amount was credited to the NPS account of the employee, as per the rates applicable to GPF from time to time, compounded annually.

(b) In all cases where the NPS contributions were not deducted from the salary of the Government employee for any period during 2004-201 2, the employee may be given an option to deposit the amount of employee contribution now. In case he opts to deposit the contributions. now, the amount may be deposited in one lump sum or in monthly installments. The amount of installment may be deducted from the salary of the Government employee and deposited in his NPS account. The satre may qualify for tax concessions under the Income Tax Act as applicable to the mandatory contributions of the employee.

(c) In all cases where the Government contributions were not remitted to CRA system or were remitted late (irrespective whether the employee contributions were deducted or not), the amount of Government contributions may be credited to the NPS account of the employee along with interest for the period from the date on which the Government contributions were due till the date the amount is actually credited to the NPS account of the employee, as per the rates applicable to GPF from time to time. Instructions to this effect may be issued by the Department of Expenditure/Controller General of Accounts. All such cases of delay may be resolved with in a period three months.

3. In pursuance of the aforesaid provisions of the said Notification dt. 31.1.2019, all the Ministries/Departments are required to ensure that the
decisions, as contained therein insofar as these relate to the issue of delayed credit of NPS contribution to CRA system, are carried out in respect of Central Government employees under their administrative purview in consultation with the concerned Financial Advisors and the respective pension accounting organizations, i.e., Controller General of Accounts in respect of Central Civil Ministries/Departments, Railway Accounts in respect of Ministry of Railways, P&T Accounts in respect of employees of Department of Posts and Department of Telecommunication and the Controller General of Defence Accounts in respect of Defence Civilians.

4. While carrying out the above decision contained in the afore said notification dt 31.1.2019, it has to be ensured that the modalities for implementing the same are uniform across the pension accounting organizations and, therefore, for this purpose, the office of Controller General of Accounts of this Department shall be the nodal organization for laying down the modalities. Accordingly, the office of Controller General of Accounts shall issue guidelines for the purpose. The concerned Financial Advisor shall be the central point for the purpose in the respective Ministries/Departments.

5. It is likely that the concerned Ministries/Departments need data and information from the Central Record keeping Agency, namely, NSDL, to carry out the above decision in respect of employees under their administrative domain. In order, therefore, to facilitate such action by the Ministries/Departments, the CRA shall look into its record and in all cases which are covered under the decision contained in the aforesaid Notification dt. 31.1.2019, it shall pass on such employee-wise details , on its own, to the concerned Head of the Office and DDO/PAO, where the employee is currently posted within 15 days of the date of issue of these orders so that the desired and timely action gets initiated by the Ministries/Departments.

6. In their application to the employees working in the Indian Audit & Accounts Department, these orders issue in consultation with the Office of Comptroller & Auditor General of India.

7. Hindi version of this order is attached.

(Amar Nath Singh)
Director

Source: DoE

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“The monthly contribution would be 10 percent of the Basic Pay plus Dearness Allowance (DA) to be paid by the employee and 14 percent of the Basic Pay plus DA by the Central Government”

Streamlining the Implementation of National Pension System (NPS)

MINISTRY OF FINANCE
(Department of Financial Services)
NOTIFICATION

New Delhi, the 31st January, 2019

F. No. 1/3/2016-PR. – In partial modification of para 1(i) of Ministry of Finance’s Gazette Notification No. 5/7/2003-ECB-PR dated 22nd December, 2003, based on the Government’s decision on 6th December, 2018 on the recommendations of a Committee set up to suggest measures for streamlining the implementation of National Pension System (NPS), the Central Government makes the following amendments in the said notification, namely :

(1) In para I (i) of the said notification, for the words “The monthly contribution would be 10 percent of the salary and DA to be paid by the employee and matched by the Central Government”, the words “The monthly contribution would be 10 percent of the Basic Pay plus Dearness Allowance (DA) to be paid by the employee and 14 percent of the Basic Pay plus DA by the Central Government” shall be substituted.

(2) The following provisions shall be inserted after para 1(v) of the said notification, namely:

CHOICE OF PENSION FUND AND INVESTMENT PATTERN IN TIER-I OF NPS AS UNDER:

(vi) Choke of Pension Fund: As in the cast of subscribers in the private sector, the Government subscribers may also be allowed to choose any one of the pension funds including Private sector pension funds. They could change their option once in a year. However, the current provision of combination of the Public-Sector Pension Funds will be available as the default option for both existing as well as new Government subscribers.

(vii) Choice of Investment pattern: The following options for investment choices may be offered to Government employees:

(a) The existing scheme in which funds are allocated by the PFRDA among the three Public Sector Undertaking fund managers based on their past performance in accordance with the guidelines of PFRDA for Government employees may continue as default scheme for both existing and new subscribers.
(b) Government employees who prefer a fixed return with minimum amount of risk may be given an option to invest 100% of the funds in Government securities (Scheme G).
(c) Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes.

(A) Conservative Life Cycle Fund with maximum exposure to equity capped at 25% – LC-25.

(B) Moderate Life Cycle Fund with maximum exposure to equity capped at 50% – LC-50.

(viii) Implementation of choices to the legacy corpus: Transfer of a huge legacy corpus of more than Rs. 1 latch crore in respect of the Government sector subscribers from the existing Pension Fund Managers is likely to impact the market. It may be practically difficult for the PFRDA to allow Government subscribers to change the Pension Funds or investment pattern in respect of the accumulated corpus, in one go. Therefore, for the present, change in the Pension Funds or investment pattern may be allowed in respect of incremental flows only.

(ix) Transfer of legacy corpus in a reasonable time frame: PFRDA may draw up a scheme for transfer of accumulated corpus as per new choices of Government subscribers in a reasonable time frame of say five years. Once PFRDA draws up this scheme, change in the Pension Funds or investment pattern may be allowed in respect of the accumulated corpus in accordance with that scheme.

COMPENSATION FOR NON-DEPOSIT OR DELAYED DEPOSIT OF CONTRIBUTIONS DURING 2004-2012:

(x) In all cases, where the NPS contributions were deducted from the salary of the Government employee but the amount was not remitted to CRA system or was remitted late, the amount may be credited to the NPS account of the employee along with interest for the period from the date on which the deductions were made till the date the amount was credited to the NPS account of the employee, as per the rates applicable to GPF from time to time, compounded annually.

(xi) In all cases where the NPS contributions were not deducted from the salary of the Government employee for any period during 2004-2012, the employee may be given an option to deposit the amount of employee contribution now. In case he opts to deposit the contributions now, the amount may be deposited in one lump sum or in monthly installments. The amount of installment may be deducted from the salary of the Government employee and deposited in his NPS account. The same may qualify for tax concessions under the Income Tax Act as applicable to the mandatory contributions of the employee.

(xii) In all cases where the Government contributions were not remitted to CRA system or were remitted late (irrespective whether the employee contributions were deducted or not), the amount of Government contributions may be credited to the NPS account of the employee along with interest for the period from the date on which the Government contributions were due till the date the amount is actually credited to the NPS account of the employee, as per the rates applicable to GPF from time to time. Instructions to this effect may be issued by the Department of Expenditure/ Controller General of Accounts. All such cases of delay may be resolved within a period of three months.

2. The above provisions shall come into force with effect from 1st April, 2019.

MADNESH KUMAR MISHRA, Jt. Secy.

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