Nonetheless, in response to an ET report, this affect could also be mitigated if the NPS is designated to handle the particular person pension fund, which is among the two funds proposed beneath the UPS.
The person fund will comprise the worker contribution, amounting to 10% of primary pay and dearness allowance, together with an identical contribution from the federal government.
Pension Scheme Subscribers
An extra authorities contribution of 8.5% of primary and DA for all staff can be maintained in a separate fund.
Presently, the NPS has 2.65 million central authorities subscribers, representing 27.1% of the scheme’s whole corpus of Rs 12.8 lakh crore. The destiny of this corpus stays unsure as central authorities staff transition to the UPS, the monetary every day’s report stated.
The implementation of the brand new scheme is about to start from April 1, 2025. If state governments additionally introduce UPS-like schemes and supply NPS subscribers with the selection to change, the affect could be much more important.
Additionally Learn | Unified Pension Scheme vs OPS vs NPS: How is UPS completely different from Nationwide Pension Scheme, Outdated Pension Scheme?
The NPS at the moment has 6.7 million subscribers from states, accounting for 49.4% of the overall scheme corpus. Collectively, state and central authorities staff make up greater than three-quarters of the scheme’s corpus, in response to the latest knowledge. The company sector subscribers quantity to 2.1 million, with a complete corpus of Rs 1.89 lakh crore, constituting 14.8% of the overall.
The scheme provides tax advantages on contributions, and upon maturity, 60% of the corpus may be withdrawn tax-free, whereas the remaining stability have to be used to buy an annuity.
