Govt may amend pension scheme

The Union government is likely to amend the national pension scheme (NPS) by the year-end to ensure employees get at least 40-45% of their last-drawn salary as retirement payout based on recommendations of a high-level panel currently looking into the matter, two people familiar with the developments said.

- Zia Haq

 

The issue of pension is currently a politically polarizing matter, with several Opposition-ruled states switching to the old pension scheme (OPS), which offered pensioners monthly benefits of 50% of their salary drawn at the time of retirement.

The current market-linked pension plan, launched in 2004, offers no such guaranteed base amounts. The other point of contention is that the NPS is based on an employee contribution of 10% of their salary, with the government contributing 14%, while there is no employee contribution in OPS.