Big gift to be given by Modi government to central employees, plan to give 50% pension

Modi Govt 3.0 on Pension Scheme: Central employees may get a big gift in the new tenure of Narendra Modi government. The government is planning a major hike in the pension benefits of central government employees under the National Pension System (NPS). Under this, the employees will get a guarantee of up to 50 percent of the last basic salary in the form of pension. If you understand in simple language then 50 percent of the last basic pay of the employee before retirement will be given as monthly pension.

Composition of the panel in 2023

In fact, a panel chaired by Finance Secretary TV Somanathan was constituted in March 2023 during the second term of the Narendra Modi government. The panel was constituted to suggest ways to enhance pension benefits under NPS for government employees without reverting to Old Pension System (OPS). The government has taken this decision at a time when many states have started moving back to OPS from NPS.

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Mention of Andhra Pradesh model

According to Financial Express, the panel has submitted its report to the government in May. The report largely reflects the Andhra Pradesh NPS model implemented in 2023. It can be called a mixed model of old and new pension scheme. Under the Andhra Pradesh Guaranteed Pension System (APGPS) Act, 2023, government employees will be given 50 percent of their last pay as monthly pension. This will also include dearness relief i.e. DR. Apart from this, 60 percent of the monthly pension is guaranteed to the spouse of the deceased employee.

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What does this NPS proposal say?

Under the new proposal, central employees will get a pension guarantee of up to 50 percent of their last basic salary. Any shortfall in the pension fund required to meet the guaranteed pension amount will be covered from the Central Government budget. It could benefit around 8.7 million central and state government employees. These will be the employees who are enrolled in NPS since 2004.

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