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old pension scheme Like the Old Pension Scheme-OPS, preparations have started to give guaranteed pension to the employees in the National Pension System (NPS). This information has been received from government sources. According to the information received, a committee has recently been constituted under the chairmanship of Finance Secretary TV Somanathan to make NPS attractive and favorable for the employees. That committee can recommend the government to give guaranteed pension in NPS also without changing the non-contributory system. Guaranteed pension means that the way the old pension scheme used to get pension of 50 percent of the employee’s last salary, in the same way it will start getting in NPS. Till now pension is available on the basis of contribution made in NPS.
Preparing to make NPS more attractive
Let us tell you that the government had brought NPS in 2004. Since then trying to make this pension system attractive but not getting the desired success. Meanwhile, the government has implemented NPS by removing the old pension system for government employees, which is being opposed across the country. Many states have again implemented the old pension system in view of the growing opposition. However, the employees are not happy with this and are protesting. Let us tell you that currently the government contributes 14% of the salary and the employee contributes 10% to the NPS corpus.
Why employees are unhappy about NPS
Let us tell you that inflation has been linked in the Old Pension Scheme. Due to this, the pension of every government employee gets an increase of 6-8% annually. This increases the financial burden on the government. NPS was introduced to reduce this burden. Both the government and the employee get the option of investing in NPS. On retirement, the employee gets the facility of withdrawing a lump sum from that deposit. he/she can get the remaining amount as pension. If we talk about OPS, then with OPS you get returns and tax free income. The old pension scheme makes the income tax free. At the same time, the new pension scheme allows tax exemption of 60 per cent of the corpus on maturity, and the remaining 40 per cent is taxable when invested in annuity. In the old pension scheme, 50 percent of the last salary is available as monthly pension.
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