After the announcement lasts month by Finance Minister Nirmala Sitharaman to form a panel to review the pension system for government employees, the Finance Ministry Thursday set up a four-member committee headed by Finance Secretary TV Somanathan. It, however did not specify any timeline for the submission of the recommendations by the committee.
As per its term of reference, the committee will suggest whether any changes are warranted given the existing framework and structure of the National Pension System (NPS), also called the new pension scheme, as applicable to government employees.
About NPS
The National Pension System is a defined-contribution pension system in India regulated by Pension Fund Regulatory and Development Authority which is under the jurisdiction of Ministry of Finance of the Government of India. It is a government-sponsored pension scheme, was launched in January 2004, for government employees. It was opened to all sections in 2009. A subscriber can contribute regularly in a pension account during her working life, withdraw a part of the corpus in a lump sum and use the remaining corpus to buy an annuity to secure a regular income after retirement.
Benefits of NPS
- It is voluntary - A Subscriber can contribute at any point of time in a Financial Year and also change the amount he wants to set aside and save every year.
- It is portable - Subscribers can operate their account from anywhere, even if they change the city and/or employment.
- It is flexible - Subscribers can choose their own investment options and pension fund and see their money grow.
- It is simple - Subscriber is required to open an account with any one of the POPs (Point of Presence) or through eNPS.