There is no proposal to replace the National Pension System (NPS) with the old pension scheme, the Lok Sabha was informed today.
The NPS gives the utmost importance to the welfare of subscribers, Minister of State for Personnel Jitendra Singh said in a written reply.
“Representations have been received regarding the implementation of NPS which, inter alia, include the demand that the NPS may be scrapped and the government may re-introduce the old defined benefit pension system,” the minister added.
The government made a conscious move to shift from the defined benefit pay-as-you-go pension scheme to the defined contribution system, now called NPS, after considering the “rising and unsustainable pension bill”, he said.
“There is no proposal to replace the NPS with the old pension scheme in respect of central government employees recruited on or after April 1, 2004,” he said.
The transition also has the added benefit of freeing the government’s limited resources for more productive and socio-economic sectoral development, Singh said.
Under the defined benefit pension system applicable to government servants appointed before April 1, 2004, a pension is calculated based on the qualifying service and the last pay drawn by the employee. Under the NPS, individual savings are pooled into a pension fund which are invested by the government’s Pension Fund Regulatory and Development Authority.
Source - Gconnect