The present pension system has been called into question by workers from several states. Several states already have made the transfer back to the previous pension system, like Rajasthan, Chhattisgarh, and Jharkhand.
Pension system
The National Pension Plan (NPS) will be reviewed by a committee led by the finance secretary, the Centre’s finance minister Nirmala Sitharaman stated on Friday. The group will find a solution to the pensions problem.
There have been criticisms that the National Pension System for government employees needs to be changed. Speaking before the Lok Sabha, she continued, “I propose setting up a committee under the finance secretary to investigate the pensions issue and create a plan that satisfies employee requests while maintaining financial prudence.
The nation’s current pension plan, also referred to as the new pension plan, was introduced in 2003 and entered into force on January 1, 2004, she added, “and will be developed for approval by both. The NPS was based on a causal system, as opposed to the old pension plan, and the government provided the pension sum.
It was created to turn tiny savings into investments and to offer secure retirement income in a way that is economically responsible.
In the NPS, the government mandatorily charges 10% of an employee’s base salary and special allowances (DA) from their pay while also contributing the same amount to the pension fund.
The employee will receive 60% of this money back upon retirement, with the other 40% being required to be placed in an annuity for their pension.
A modification in the NPS has been demanded by workers from numerous states. Some states have returned to the OPS, such as Rajasthan, Chattisgarh, Punjab, and Jharkhand. In Haryana, there are presently rallies against the same.