FM Nirmala Sitharaman announces panel to improve national pension scheme
By Lokmat English Desk | Published: March 25, 2023 12:59 PM2023-03-25T12:59:24+5:302023-03-25T12:59:24+5:30
Next 
For the past few months, government employees across the country have been demanding the resumption of the old pension scheme. The employees of some states also protested for this demand, the employees of Maharashtra were also protesting on the streets last week.
Some state governments have accepted the demands of the employees in this regard. But the central government is trying to find a middle ground regarding the old and the new pension scheme.
Finance Minister Nirmala Sitharaman, while presenting the Finance Bill on Friday, said in the Lok Sabha that there is a need to reform the National Pension System.
The Finance Minister proposed to set up a committee to reform the NPS in matters related to pension of government employees. A committee will be constituted under the leadership of Finance Secretary.
What steps can the government take to find a middle ground in employees' long-standing demand for restoration of old pensions? Now that's the question. The government should try to find a way to please the employees without putting an additional burden on the exchequer.
The Modi government is trying to find a middle ground on the old pension demand. The government is considering two options. As a first option, government employees are being considered to get a guaranteed pension of around 50% of their last salary drawn under NPS.
Union Finance Ministry is thinking in this regard. There may be some changes in NPS. After retirement the employee can get 41.7% amount as lump sum. Remaining 58.3% amount can be availed on annuity basis.
If the 58.3% fund made up of central/state government contributions is annualized at 14%, the pension in NPS can be close to 50% of the last drawn salary. No official statement has been given by the government in this regard.
The biggest advantage in the old pension scheme is based on last salary. Apart from this, if the rate of inflation increases, the DA also increases. Even when the government implements the new pay commission, it increases the pension.
