GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’GConnect
has published an article titled, ‘NPS is far beneficial than Government
Pension’ – Comparison of New Pension Scheme (National Pension Scheme)
and Central Government Pension
A very popular website among
Central Government employees, GConnect, which began functioning more
than 8 years ago, continues to be a strong line of communication between
the Central Government and its employees.
The article that was
published yesterday seeks to answer critics who claim that the new
pension scheme is outright bad. GConnect has made it very clear that the
opinions expressed in the article belong to its writer, Mr. Dorai,
Deputy Director, ESIC Model Hospital and that the website doesn’t
necessarily subscribe to them.
The ‘study report,’ that compares
the salient features of the old(Central Government Pension Scheme) and
new pension schemes, is bound to create controversies.
While
various Central Govt employees associations and federations are putting
pressure on the Government to withdraw the new pension scheme and
enforce the previous one, we believe that this article is going to make a
huge impact.
The writer begins the article by stating that those
who are opposing the new pension scheme, with more benefits than the
old pension scheme, are doing so due to their ignorance. The article
also explains how the new pension scheme could create huge wealth.
The
report gives as an example, the case of an employee who joins the
Central Government employment as a Upper Division Clerk(UDC) in 2014 and
retires after 35 years service, in 2049. The report gives a comparative
study of how the pension fund grow each of these 35 years. The study
also assumes a regular dearness allowance of 6% every six months, and an
annual increment of 3%.
The study also assumes that, at an
interval of 10 years, the employee gets 3 promotions during his service
tenure. Most importantly, it is assumed that matching the employee’s
contribution, the Government’s contribution too would witness an 8.7%
increase per annum.
At the time of retirement, the employee is
likely to get Rs. 2,87,26,201, which is split into two shares – 40% and
60%, which amounts to Rs. 1,14,90,481, and Rs. 1,72,35,720,
respectively. 60% of the lumpsum pension wealth is given at the time of
retirement. The remaining 40% is invested in an annuity scheme.
It
is stated that the monthly pension will be a minimum Rs. 83,306. In
addition to this, at the age of 70, the employee gets the remaining 40%
back. The article strongly claims that this money could be the gift that
the person leaves behind for his future generation.
The
article’s highlight feature is the claim that if the Pay Commission
recommendations are taken into account, the amount could be much higher
and that the UDC could get as much as Rs. 5 crores at the time of
retirement.
According to the old Govt pension scheme, the
employee’s monthly pension amount would be Rs. 1,00,934, and after his
demise, his spouse would get Rs. 10,317 plus Dearness Allowance. After
his/her death, there are no more benefits for the family.
The
article is indirectly stating that the absence of gratuity and other
such benefits is not a huge issue. According to the old Govt pension
scheme, at the time of retirement, the employee would make only Rs.
38,32,550, which is Gratuity (16.5 months) + EL Encashment +
Commutation.
While discussing the General Provident Fund (GPF),
the article assumes that since nobody leaves anything much in this fund,
its overall impact on the total pension fund would be minimal.
The writer concludes his article by declaring that those who oppose the new pension scheme lack intelligence.
Source:
7thpaycommissionnews.in
Leave Travel Concession
to travel via air to Jammu & Kashmir, the North Eastern Regions and
the Andaman and Nicobar islands has been extended for another two years
for Central Government employees.
