Pension Act and Cabinet boost for Promoter Raj
Implementation of Pension Fund Regulatory & Development Authority Act major task,Chidambaram sets the agenda for the parliament!
Vegetable prices push Oct retail inflation to double-digit zone
CPI-based inflation at 10.09%; rising onion and tomato prices add to pressure
Pension Schemes Under The Provident Fund Act (Or How India Robs Its Industrial Workers In The Name Of Social Security)
Implementation of Pension Fund Regulatory & Development Authority Act major task,Chidambaram sets the agenda for the parliament!
The sluggish industrial growth may continue its run till the next year as the government expect more than 5% growth in the sector by 2014-15.
Meanwhile,the Cabinet will meet today in the evening to take a call on relaxing riders for foreign direct investments (FDI) in the construction development sector. The move comes as FDI in the realty sector declined by 57% in 2012-13 year-on-year.
At present, 100% FDI is permitted thorugh automatic route in thereal estate sector which includes townships, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level built-up infrastructure.
Now, the proposal is to relax conditions attached to the FDI in this sector.
The proposal, moved by the Department of Industrial Policy and Promotion, sought easing conditions for exit for foreign players before the three-year lock-in period. They can exit on receipt of occupancy and or completion certificate issued by the competent local authority or by way of sale to another non-resident investor subject to a lock-in period of three years from the date of the purchase by the other foreign investor, the proposal said. However, the transfer from foreigner to another will be permissible only once, with no possibility of waiver of the fresh lock-in period.
The proposal also sought to reduce a minimum carpet area of 20,000 square metre in all class-1 cities that has a population of more than one lakh, against the requirement of 50,000 square metre built up area at present. As such, the built-up area is sought to be replaced with carpet area as the latter can be objectively measured.
DIPP asked for reducing the minimum requirement for land for a serviced housing project from 10 hectares to just 5 hectares as there is shortage of land in urban areas and cost of land is too high.
Besides, the DIPP proposed that the minimum paid-up capital in wholly owned subsidiary of foreign parterns be reduced to $5 million, from $10 million at present. In case of joint ventures, $5 million minimum capital is required even now. Companies would, however, need to bring the entire amount within six months of commencement of the project. The commencement of the project will be the date of building plan approval by the statutory authority. There is no clarity at present as to when the commencement of the project be counted from.
Ministry of Finance
Detailed information about the Pension Fund Regulatory and Development Authority Act, 2013 is given. Users can get details related to the Act, its short title, extent, definitions and commencement. Information on the Pension Fund Regulatory and Development Authority and sections of the act is also available.
पेंशन बिल क्या है?
इकनॉमिक टाइम्स | Jun 11, 2012, 03.07PM IST
सरकार ने यूपीए के सहयोगी दलों के विरोध की वजह से गुरुवार को पेंशन बिल पर फैसला टाल दिया। इस बिल में क्या है, यहां हम आपको उसकी जानकारी दे रहे हैं
पेंशन बिल क्या है?
पेंशन फंड रेग्युलेटरी एंड डिवेलपमेंट अथॉरिटी (पीएफआरडीए) बिल 2011 को पेंशन बिल कहा जाता है। इसे पिछले साल 24 मार्च को लोकसभा में पेश किया गया था। इसके बाद इसे वित्तीय मामलों पर बनी स्थाई समिति को भेजा गया। सरकार ने 2005 में भी इसी तरह का बिल पेश किया था, लेकिन इससे पहले कि वह पास होता, 14वीं लोकसभा खत्म हो गई।
एनपीएस को बढ़ावा
डिफाइंड बेनिफिट सिस्टम की वजह से सरकार पर पेंशन लायबिलिटी बहुत ज्यादा है। इस सिस्टम के तहत कर्मचारियों को उनकी आखिरी सैलरी के आधार पर पेंशन भुगतान किया जाता है। 2004 में यह डिफाइंड कॉन्ट्रिब्यूशन सिस्टम के मुताबिक हो गया, जिसके मुताबिक कर्मचारियों को उनकी अर्निंग से ही रिटारयमेंट के लिए बचत करनी पड़ती है। इसके खत्म होने के बाद न्यू पेंशन सिस्टम (एनपीएस) शुरू किया गया। यह जनवरी 2004 के बाद से सरकारी नौकरी जॉइन करने वालों के लिए था। इसके साथ ही पेंशन फंड रेग्युलेटरी एंड डिवलपमेंट अथॉरिटी का गठन किया गया, ताकि वह इस स्कीम की निगरानी कर सके। यह पहले से ही राज्य और केंद्र सरकार के कर्मचारियों की रिटायरमंेट सेविंग्स मैनेज करता था। सरकार अब एनपीएस को प्रीमियर रिटायरमेंट सेविंग्स स्कीम के तौर पर स्थापित करना चाहती है।
फिलहाल इसका स्टेटस क्या है?
स्थाई समिति ने पिछले साल अगस्त में इस बिल पर अपनी रिपोर्ट सौंपी थी। सरकार सिफारिशों को लागू करके एक नया बिल लाना चाहती है। हालांकि, सहयोगी दलों के विरोध की वजह से ऐसा नहीं हो पा रहा।
इस बिल के प्रमुख प्रावधान क्या हैं?
पीएफआरडीए को ताकतवर बनाना, ताकि वह इस सेक्टर को डिवेलप और इसकी निगरानी कर सके। इस सेक्टर में विदेशी निवेश होता है, लेकिन उसकी कोई सीमा तय नहीं है। एनपीएस के मैनेजमेंट के लिए डिटेल फ्रेम वर्क तैयार किया जाए। इसके दो तरह के अकाउंट हैं- टियर 1 और टियर 2। इसमें टियर 1 अकाउंट से रकम रिटायरमेंट के बाद ही निकाली जा सकती है। एनपीएस में इनवेस्टमेंट के तीन ऑप्शन हैं। इसमें इक्विटी, सरकारी बॉन्ड और कॉरपोरेट बॉन्ड शामिल हैं।
कमेटी की मुख्य सिफारिशें क्या हैं?
इस सेक्टर में एफडीआई की लिमिट 26 फीसदी हो, जैसा बीमा सेक्टर में है। इमरजेंसी पड़ने पर टियर-1 अकाउंट से पैसा निकालने की इजाजत मिले। मिनिमम गारंटीड रिटर्न के साथ 100 फीसदी पैसा सरकारी सिक्योरिटीज में लगाया जाए।यूपीए के सहयोगी दल बिल का विरोध क्यों कर रहे हैं?वे इस सेक्टर में विदेशी निवेश के खिलाफ हैं। वे नहीं चाहते कि प्राइवेट कंपनियां पेंशन स्कीम को मैनेज करें।
Rules / Regulations / Acts administered by the
Department of Pension and Pensioners' Welfare
* The provision under these rules relating to preparation of pension papers, sanction, authorization and disbursement of pension can be seen at 'Pension Procedure'
Parliament passes key Pension Bill after 10-year delay
PTI New Delhi, September 6, 2013 | U
After a delay of nearly a decade, Parliament on Friday passed a key economic reforms legislation, thePension Bill, that aims to create a regulator for the sector and allows at least 26 per cent FDI.
The Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, was passed in the Rajya Sabha with 115 MPs voting in favour and 25 against including members form Left parties and TMC. The Bill was passed in the Lok Sabha on September 4.
Replying to the debate in Rajya Sabha, Finance Minister P Chidambaram said, "Some of them have legitimate concerns, which we have to address. The Bill has travelled for nine years. Let us give the Bill the honour that it deserves and pass it."
The Bill would make the Pension Fund Regulatory and Development Authority a statutory authority, unlike its present non-statutory status, he said.
The Bill provides subscribers a wide choice to invest their funds including for assured returns by opting for Government Bonds as well as in other funds depending on their capacity to take risk, a provision that came from opponents of the legislation.
It pegs the FDI in pension sector at 26 per cent or such percentage as may be approved for the insurance sector, which ever is higher.
Presently, saving for retirement by people is very low in the country. The New Pension System (NPS) aims to promote "saving while you earn" especially for retirement and is mainly for those who have a regular income, Chidambaram said.
He said government had accepted all but one of the recommendations of the Standing Committee on the subject.
On security of funds and returns, he said, "There is enough structure in place in NPS that funds will be managed well and safely. NPS gives better returns than EPS. The returns are more than government bonds. Returns are quite adequate."
The Pension Bill has been hanging fire since 2005 when it was first introduced in Parliament. It was reintroduced in 2011.
Chidambaram said the current system is unsecured. Hence, it was necessary to make the Pension Fund Regulatory and Development Authority (PFRDA) a statutory authority as it is managing the corpus ofRs.35,000 crore belonging to 52.83 lakh subscribers including those of 26 state governments.
"...Rs.35,000 crore should not be used by unstatutory authority...All this bill does is to make non-statutory authority a statutory authority," he said, adding the authority will have powers to penalise.
PFRDA was established by the government in August, 2003.
On members' suggestion to bring down the employee's annual contribution fromRs.6,000, he said, "This is not a large amount. Given the current salary and possibility 7th pay commission in two years, saving ofRs.500 per month is feasible."
He also clarified that if a government employee dies prematurely, his family would get the pension benefits that prevailed prior to 2004.
On a member's suggestion to allow investment of funds in long term 30-40 years bonds, Chidambaram said, "Bond market in India is not well developed. We have bonds for 10 years and 20 years and not beyond this. We will develop the market. I sincerely hope the day will come soon."
On giving tax exemption, he said he will not encourage any law dealing with tax other than the Income Tax Act. He asked the member to wait till Direct Tax Code comes into effect.
According to the Bill, there is an incentive for subscribers to join the New Pension Scheme (NPS) as there is provision for withdrawals for limited purposes from Tier-I pension account.
The subscriber seeking minimum assured returns would be allowed to opt for investing funds in such scheme providing minimum assured returns as may be notified by the Authority.
The Bill was referred to the Standing Committee twice -- in 2005 and 2011.
The NPS has been made mandatory for all the central government employees (except armed forces) entering service with effect from January 1, 2004. It has been launched for all citizens including unorganised sector workers, on voluntary basis, from May, 2009.
Finance Minister P Chidambaram today said the implementation of the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013 in letter and spirit is a major task before the government.
"...With the PFRDA Bill having been passed by Parliament, the major task before us was to implement it in letter and spirit," he said at the 4th meeting of the Consultative Committee attached to the Ministry of Finance here.
The PFRDA Act would give statutory status to the pensions sector regulator, and in addition to other objectives, aims to address apprehensions regarding safety and yield under the National Pension System (NPS).
Chidambaram mentioned that most countries are moving from a 'defined benefit' pension system to a 'defined contribution' system to enable pension-related commitments to be sustainably discharged.
He stated that the salient provisions of the Act related to subscriber interest include choice of pension fund manager and investment schemes to the subscriber, availability of minimum assured return schemes to be notified by the PFRDA and the option of investment only in government securities.
The Minister replied to the various suggestions and queries of the members and explained how the Act and efforts of the Government since 2003-04 had tried to address these concerns.
He mentioned that these initiatives are relatively recent in origin. "Hence, work on the NPS was still a work in progress that would, however, achieve these various objectives over time," he said.
At present the total pension funds under NPS were to the tune of Rs 37,000 crore.
The Finance Minister further stated that there was a need to extend the reach of the NPS.
Observations related to the need to keep inflation in check to ensure good real returns, focusing on the unorganised sector, ensuring that pension fund managers were of the highest ability and standing and the need for suitable publicity to create awareness about NPS, were made by members.
Members of the Committee who attended the meeting include, Arvind Kumar Chaudhary, Narahari Mahato, Partap Singh Bajwa, Prabhatsinh Chauhan, S P Y Reddy, Saugata Roy, Suresh C Angadi and W Bhausaheb Rajaram, Ajay Sancheti, Amar Singh, Rajani Patil, Rajeev Chandrasekhar, Sabir Ali, Ashok Sekhar Ganguly and Murli S Deora.
The sluggish industrial growth may continue its run till the next year as the government expect more than 5% growth in the sector by 2014-15.
"Once a pickup in industrial growth happens, moving ahead next year we should find the growth rate going back to 5-6 per cent", C Rangarajan, Chairmain of Prime Minister's Economic Advisory Council said on the sidelines of CII's 3rd Finance and Investment Summit here.
He said that he expect the industrial growth in the second half higher than that in the first half and could be more than 3%. "The impact of the various measures taken by the government will be felt in the second half", he said.
On inflation, he said he expect the rate to come down. "This has been caused mainly from food articles which will ease as a result of impact of good monsoon", Rangarajan added.
He said he sticks to the 6% target estimate of wholesale price inflation by year-end.
The factory output expanded by mere 2% in September despite hopes of a bounce back, according to data released yesterday. Data on inflation showed that Consumer Price Index based inflation went up to 10.09% in October.
Getting pension funds to invest in infra a challenge: Report
September 5, 2013 20:16 IST
Channelling pension funds to the infrastructure sector will be a challenge given the high risk associated with the key segment, a State Bank of India research report said on Thursday.
"Convincing pension funds to invest in infrastructure as an asset class will be a challenge. There is need for a separate policy to address this aspect of risk perception," it said.
The long-pending Pension Bill was passed by the Lok Sabha on Wednesday.
The total investment in the infrastructure sector in the 12th Plan (2012-17) is estimated at $1 trillion or Rs. 66 trillion with contribution from both the debt and equity segments. Of this, the pension funds are expected to contribute at least Rs. 1.5 trillion in debt component.
"This estimated contribution by pension funds towards infrastructure is on the lower side given the potential for developing pension market in the country," the report said.
As on August 14, 2013, the number of subscribers under New Pension System (NPS) was 52.83 lakh with a corpus of only Rs. 34,965 crore.
The total investment in infrastructure sector in the 12th Plan from the debt segment is projected at Rs. 22.65 trillion.
Apart from pension funds, other financial sources from the debt segment for the sector include commercial banks – Rs. 11.65 trillion; NBFCs – Rs. 6.19 trillion and external commercial borrowing at Rs. 3.31 trillion, the SBI report said.
With the Bill's passage, the Pension Fund Regulatory and Development Authority will receive statutory status and also regulate NPS, a defined contribution scheme.
The main objective of the Bill, which paves way for 26 per cent foreign investment in pension sector, is to provide a structure to plan for old age income security through NPS.
The legislation provides subscribers a wide choice to invest their funds, including for assured returns, by opting for the Government bonds as well as in other funds depending on their risk-taking capacity.
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Vegetable prices push Oct retail inflation to double-digit zone
CPI-based inflation at 10.09%; rising onion and tomato prices add to pressure
Both urban and rural areas witnessed double-digit inflation at 10.20 per cent and 10.11 per cent, respectively, in October.
Overall food and beverages inflation soared to 12.56 per cent against 11.44 per cent in September.
With food items having a weight of more than 45 per cent in the CPI, this inflation surges whenever food prices rise. On the other hand, food items have 24 per cent weight in the Wholesale Price Index (WPI) because of which the WPI inflation stood at just 6.46 per cent in September. WPI inflation for October is slated to come later this week.
"The link between good agriculture production and low food prices have been broken from 2009-10. You require efficient logistics to supply these items as well," State Bank of India Chief Economic Adviser Soumya Kanti Ghosh told Business Standard.
Besides, local problems in onion and tomatoes also added to the food inflation pressure, he said. Cyclone Phailin had affected paddy crop last month. Cereal inflation remained elevated, despite some moderation at 12.01 per cent in October from 12.77 per cent in September.
FinMin mulls measures to attract FIIs to stabilise rupee, boost stock markets
Chidambaram interacted with FIIs who expressed their concerns on taxation issues, high fiscal deficit and current account deficit
As the rupee continued to slide and stock markets persisted with heavy selling pressure, the finance ministry swung into action to assure foreign institutional investors (FIIs) of a slew of measures to increase their participation in currency derivatives and debt markets.
Finance Minister P Chidambaram on Tuesday interacted with FIIs. They expressed concern on taxation issues, the high fiscal and current account deficits, and sought removal of capital gains tax.
"Everyone was here, everyone was bullish, there were no concerns (over exchange rate)," said Chidambaram, after the meeting the FIIs.
The minister told the investors the government would stick to its target of 4.8 per cent of the gross domestic product (GDP) for the fiscal deficit and $60 billion for the current account deficit (CAD) for 2013-14. Even independent analysts expected the government to meet the new CAD target, against $70 billion pegged earlier.
However, only the government seemed to be confident of reining in the Centre's fiscal deficit at 4.8 per cent of GDP, since it constituted 76 per cent of the entire year's budget estimate in the first six months of the current financial year.
Officials said the measures, which could be announced in a month as they don't need any changes in the law, would include greater participation for FIIs in currency derivatives market, deepening the bond markets, liberal conditions for use of collateral on a par with domestic investors, clarity on permanent establishment rules and taxation issues.
In August, the Reserve Bank of India had put controls on institutional participation in the currency derivative market. So, the finance ministry is going to consider some leeway on those.
As the rupee on Tuesday declined for a fifth day in row and closed at 63.71 against the dollar, down 47 paise over the previous day's close, Mayaram said the currency would stabilise soon, amid inflows of up to $25-30 billion through the forex swap windows. He exuded confidence that as the US Federal Reserve started tapering its monetary stimulus, it would not have an impact on Indian markets.
"I think a crazy, irrational kind of a sentiment is (prevailing in the forex market)... Whoever is punting on the rupee will lose very heavily. I feel very sorry for their families," he told reporters.
The finance ministry will have a host of meetings with FIIs, as part of its efforts to engage with debt funds from the Nordic countries, West Asia and Australia and make them invest in India.
The ministry hopes the impact of QE tapering would be less under Janet Yellen, likely to take over as the US Fed chairman in January 2014.
India is planning to get its debt included in global indices including the ones run by JP Morgan and Barclays. RBI Governor Raghuram Rajan had also said the central bank would have conversations with international index agencies and some of the investment banks that create these indices.
Namrata Acharya | Kolkata
November 13, 2013 Last Updated at 00:38 IST
Mamata's potato politics sends prices crashing
Open market price cools down as chief minister orders cold storages to empty stock by December 15
The first big task in hand at the new address is a success.
Sitting in the plush office at the 14th floor of the newly-inaugurated secretariat, by default facing one of the infrastructure marvels created in the predecessor regime, the Vivekananda Setu, Chief Minister Mamata Banerjee has finally reined in the intractable potatoprices.
On Tuesday, when some cold-store owners urged the chief minister to lift the ban on potato export to neighbouring states, in a headmistress-like tone she instructed them to empty all the cold storages by December 15. Never before had the state given such a diktat.
Cold storages in West Bengal generally close by the last week of December, when farm potatoes take charge of the market supply. Between March and December, stored potatoes feed the markets.
West Bengal produces about 10 million tonnes of potatoes every year. Of this, only 5.5 million tonnes are domestically consumed. At present, close to 1.4 million tonnes of potatoes and potato seeds are in cold storage.
In the next two months, the total consumption of both would not be more than 1.2 million tonnes. Possibly, by December, nearly 0.2 million tonnes have to be dumped in open fields, which otherwise would have been exported to Odisha, Andhra Pradesh, Bihar and Jharkhand, according to Patit Paban De, member, West Bengal Cold Storage Association.
"Medinipur, Bankura and Burdwan are areas which generally export potatoes. The existing chain of marketing infrastructure do not provide for the same potatoes to be transported to local areas," said a trader.
Steps taken by West Bengal to reduce prices include direct procurement and sale at Rs 13 a kg, ban on exports and the deadline to vacate cold storages. The result: prices of potato in the open market are now Rs 15-20 a kg in West Bengal from nearly Rs 40 a kg sometime earlier.
In neighbouring states, prices have shot up to as high as Rs 50 a kg. A section of traders in Odisha had tried to stop truckloads of fish, eggs and onions coming to Bengal.
In September, farmers in Bengal had sold potato at Rs 4 a kg, a loss of Re 1 a kg. After floods and rain in October, potato prices started moving up.
Possibly, with large quantities of vegetables getting destroyed during floods in Bengal, consumption of potato went up significantly, causing a sudden rise in prices, according to Pranab Chatterjee, professor at Bidhan Chandra Krishi Viswavidyalaya.
Potato cultivation is a risky bet for farmers. Suicides and distress sale are nothing new in the growing season. The cause of the problem is poor infrastructure and poor marketing. With 10 million tonne of production, the storage capacity in West Bengal is only close to five million tonne.
While a handful of rich farmers in the districts of Paschim Medinipur, Bardhaman and Hooghly can afford to pay for transportation and rent of cold storages, a large number of farmers depend on middlemen to sell their produce.
With the cost of production at Rs 5 a kg, the rent for keeping a kg of potato in cold storage is nearly a third of the total cost at Rs 2 a kg.
Once the potatoes are sold to middlemen, it is a sophisticated trade of potato bonds. Potato bonds are simply paper slips marking the potatoes in the storages. These bonds change multiple hands, often sold at a premium. Thus, potato bonds sold at Rs 120-200 per 50 kg, normally at this time, are now selling at Rs 400-500, according to Chatterjee.
"The problem is we do not have any agency to procure potatoes, neither any maximum support price for potato procurement. Even with potato prices so high, farmers sold the crop at a loss," according to Ramprasad Ghosal, a farmer in Hooghly.
Nayanima Basu | New Delhi
November 13, 2013 Last Updated at 00:30 IST
Biz to be Cameron's only focus on whirlwind visit
To meet prime minister, Mamata Banerjee
As the country celebrates Children's Day on the 124th birth anniversary of Jawaharlal Nehru, British Prime Minister (PM) David Cameron will make a "hurricane" visit to India to strengthen business ties between the countries.
The visit, his third in two years, would focus only on business, even as he meets PM Manmohan Singh in Delhi followed by a luncheon with West Bengal Chief Minister Mamata Banerjee, sources told Business Standard.
During the one-day visit, Cameron is expected to raise issues concerning British business and strategic affairs with the PM. Issues concerning flagship British companies like Vodafone and Tesco are going to be high on agenda.
Vodafone has been entangled in a row with Indian tax authorities, since it acquired Hutchison Whampoa's Indian mobile telephony business in 2007 for $10.7 billion. According to the Indian government, Vodafone has a tax liability of Rs 14,000 crore related to the acquisition. With elections looming, it seems a new government will take the final call.
While the government wants to fight the case under the Indian Arbitration and Conciliation Act, the telecom firm has asked for the case to be considered under the United Nations Commission on International Trade Law.
However, Vodafone recently sought approval to raise stake in its India unit from 64.38 per cent to 100 per cent for Rs 10,141 crore.
India, on the other hand, is going to make the case for more British investments in the country. With Walmart exiting the Indian retail market, the government is pinning its hopes on British retailer Tesco. In 2008, the company entered into a separate franchise pact with Trent, the retail arm of the Tata group. Both sides are expected to discuss a possible civil nuclear cooperation deal based on the joint declaration signed in 2010. India has inked pacts with the US, France, South Korea, Canada, Australia and others, as it aims to achieve a nuclear power capacity of 63,000 Mw by 2032 from the current 4,780 Mw.
Cameron, who will be coming with more than 20 businessmen, is likely to explore investment opportunities in West Bengal, as he meets Banerjee there. This will be the second such visit by any British PM to Kolkata in the last 16 years after former British PM John Major visited the city.
In Kolkata, Cameron will also be addressing the Indian Institute of Management to invite premium students there to choose the UK as a destination for higher studies.
During his last visit here in February, India and the UK vowed to fight tax evasion and avoidance through the implementation of Amending Protocol of their Double Taxation Avoidance Convention (DTAC) signed by both sides in October last year.
Both sides are on track to double trade in merchandise by 2015 from $15 billion last fiscal.
Issues in Pension Reform Bill 2013
NOVEMBER 6, 2013 BY JIDE OJO
| credits: File copy
Pension matters are dear to my heart. My father taught for 40 years and retired as a school headmaster. The unfortunate thing is that he neither got his pension nor his gratuity till he died three years into retirement. He was not alone. Many senior citizens of this country suffered a similar fate as they languished in pains, ailments and died miserably while waiting to be paid their retirement benefits. My office is at present enrolled in the contributory pension scheme and over the years, I have been able to accrue some reasonable pension savings under this scheme. I hope not to suffer the same upshot as my dad when my retirement comes.
It is for these reasons that I have taken more than a cursory interest in pension matters. The administration of ex-president Olusegun Obasanjo, in a bid to reform pension management in the country in 2004, got the National Assembly to pass the Pension Reform bill through which the National Pension Commission was established. Giving historical background to some of the issues necessitating the establishment of PenCom, the Commission on its website stated as follows:
"Prior to the enactment of the Pension Reform Act 2004, pension schemes in Nigeria had been bedevilled by many problems. The Public Service operated an unfunded Defined Benefits Scheme and the payment of retirement benefits were budgeted annually. The annual budgetary allocation for pension was often one of the most vulnerable items in budget implementation in the light of resource constraints. In many cases, even where budgetary provisions were made, inadequate and untimely release of funds resulted in delays and accumulation of arrears of payment of pension rights. It was obvious therefore that the Defined Benefits Scheme could not be sustained.
"In the private sector on the other hand, many employees were not covered by the pension schemes put in place by their employers and many of these schemes were not funded. Besides, where the schemes were funded, the management of the pension funds was full of malpractices between the fund managers and the Trustees of the pension funds".
There are five cardinal objectives and features of the Pension Reform Act 2004. Namely: to ensure that every person who worked in either the public service of the Federation, the Federal Capital Territory or the private sector receives his retirement benefits as and when due; to assist individuals by ensuring that they save to cater for their livelihood during old age and thereby reducing old age poverty; to ensure that pensioners are not subjected to untold suffering due to inefficient and cumbersome process of pension payment; to establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory and the Private Sector; and to stem the growth of outstanding pension liabilities.
Almost a decade after the establishment of PenCom and licensing of scores of Pension Fund Administrators, Pension Fund Custodians and Closed Pension Fund Administrators, the woes of Nigerian workers have yet to be over. There are still issues with the management of pension fund. For instance, the state and local governments' employees are not covered by the PRA 2004. Even the federal workers and the private sector that are compelled to operate contributory pension scheme are still having challenges. Just last January 28, an Assistant Director in the Police Pension Office, John Yakubu Yusuf was sentenced to two years' imprisonment with an option of N750,000 fine for conniving with others to defraud the Police Pension Office and pensioners of N27.2bn. Several other persons have been arrested and currently being prosecuted for diverting, embezzling or misappropriating the pension funds of workers.
According to a report in The Nation, Monday, November 4, 2013, titled, 'Can Pension Reform Bill end pensioners' agony', "The action and inaction of some pension administrators laid the unfortunate foundation for the scandalous deeds trailing the country pension sector. Barefaced lies and confounding falsehood, ever blossoming thievery of pension funds and activities of rapacious pension administrators more than anything made the repeal and re-enactment of the Pension Act 2004 more urgent than ever". Senate President David Mark described those prowling pension funds as stealing blood money.
In response to the general outcry for further reform of Nigeria's Pension industry, President Goodluck Jonathan in April 2013 forwarded an executive bill to the National Assembly to tighten the nuts and bolts of the PRA 2004. Highlights of the Pension Reform Amendment Bill 2013 are as follows: To enhance the powers of the Pension Commission in its regulatory and enforcement activities as well as to enhance the protection of pension fund assets; to unlock the opportunities for the deployment of pension assets for national development; to review the sanctions regime to reflect current realities; and to provide for the participation of the Informal Sector.
The PRAB 2013 also seeks to provide the framework for the adoption of the Contributory Pension Scheme by States and Local Governments. This is long overdue. The bill also aims to create new offences and provide for stiffer penalties that will serve as a deterrent against mismanagement or diversion of pension funds assets under any guise, as well as other infractions of the provisions of the Act. The bill equally seeks an upward review of minimum rate of pension contribution from the current 15 per cent. The proposed minimum rate is 20 per cent of the monthly emolument payable as 12 per cent by the employer and 8 per cent by the employee.
The PRAB 2013 scrutinised the provision of the 2004 Act with respect to qualifying years of experience for the Director-General such that the requirement is graduated in descending order from that of the Chairman at 20 years to that of the Director-General at 15 years. This particular clause in the bill has been most contentious. Opinions are divided on the justification for the reduction in the number of years of experience the DG of PenCom needs to have from 20 years to 15 years. A section of the media believes that the request is self serving and uncalled for. This alteration being proposed by the President is supposedly meant to pave the way for the acting Director General of National Pension Commission, Chinelo Anohu-Amazu, to be confirmed as substantive chief executive. She was appointed acting DG in December 2012 at a time she was allegedly due to retire having served for eight years as Company Secretary on the level of director and possessing only 15 years experience in the industry.
The Joint National Assembly Committees on Pension and Establishment Matters led by Senator Aloysius Etok and Rep. Ibrahim Bawa Kamba has recommended that a person to be appointed to the office of DG PenCom does not even need to have the 15 years being recommended by the executive bill but should only be a 'fit and proper person with adequate cognate experience in pension matters'.
The Committee while submitting its report on October 29 said it recommended the removal of 20 years of experience and replaced it with competency just as is the case with other financial regulatory agencies such as the Central Bank of Nigeria Act, Nigeria Deposit Insurance Corporation Act 2006, Securities and Exchange Commission, National Insurance Commission and Corporate Affairs Commission Acts. I do hope the intention of the committee in making this recommendation is altruistic and not in order to satisfy the whim and caprice of the president. As observed by The PUNCH in its editorial of August 22, 2013, "Appointing a pension fund chief regulator should not be reduced to contemptible patronage or despicable cronyism". I couldn't agree more.
Pension Schemes Under The Provident Fund Act (Or How India Robs Its Industrial Workers In The Name Of Social Security)
Tens of thousands of crores of Rupees are lying unutilized in the pension fund with the Provident Fund Commissioners. Any day, the government may come out with a bill to divert this fund, which belongs to Indian working class, to some other area from where the politicians are entitled to draw the money. Let us see how:
Pension Schemes under the Provident Fund Act
Most industrial employees in India are covered by the pension schemes under the Provident Fund Act but very few of them know the stipulations of these schemes. Many do not even have any idea of how much pension they are going to get when they retire. They are simply contributing to the pension fund because the schemes are compulsory and they have nothing to choose. These pension schemes, therefore, have been described in this article in brief.
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 provides for a compulsory contributory fund for the future of an employee after his retirement or for his dependents in case of his early death. Every factory engaged in any industry and every other establishment employing 20 or more persons is covered under this act. Both, the employee and the employer, contribute to the fund at the rate of 12 per cent of the basic wages and dearness allowance payable to an employee. The total of these contributions with interest is paid to the employee at the time of his or her retirement. This fund is called Provident Fund.
Family Pension Fund 1971 (FPF-71)
It was felt that in case of premature death of a worker, the Provident Fund was too less an amount to support his family. This led to the introduction of another social security benefit, i.e., Family Pension Fund or FPF-71 by amending the Provident Fund Act in 1971.
Under FPF-71, 1.67 per cent of the pay of an employee out of both member's and employer's contributions to the provident fund was transferred to the pension fund. No separate contribution needed to be paid towards FPF-71 either by the employee or the employer. If member retires, no pension is paid to him. If the member dies while in service, a pension is paid to the spouse:
FPF-71 ceased on 16.11.1995 when the EPS-95 came into existence.
Employees Pension Scheme 1995 (EPS-95)
This scheme came into force w. e. f. 16.11.1995. The assets and liabilities of FPF-71 were transferred and merged with EPS-95. The benefits to the members under the old scheme remain protected under EPS-95. Salient features of EPS-95 are as under:
All the members of the ceased Family Pension Fund 1971 and anyone who joins a covered establishment (having 20 or more people working) on or after 16-11-95 has to compulsorily join this scheme.
EPS-95 derives its financial resource by partial diversion from the employer's contribution to the Provident Fund at the rate of 8.33% of the member's pay. For the purpose of computing EPS-95 contribution, a maximum pay of Rs. 6,500 is assumed. Unlike FPF-71, no money is diverted from the employee's contribution in this scheme.
Pension to the member for life on attaining an age of 58 years (called superannuation/retirement pension)
Pension to the members of the family upon death of the member:
a) Pension to Widow/Widower for life or till re-marriage (called widow/widower pension)
b) Pension to two children/orphans of up to 25 years of age simultaneously with widow/widower pension (called children/orphan pension).
Superannuation/retirement pension is payable to a member provided the member has a minimum of 10 years of membership in EPS-95. The amount of superannuation/retirement pension is calculated as given below:
Pensionable salary * Pensionable service
Pensionable salary = Last pay of the employee or Rs. 6,500 whichever is less
Pensionable service = No. of years for which the employee has been a member of EPS-95
The formula has been designed so that an employee who has a working life of 35 years will get half of his last pay as pension. Since the scheme has come into effect in 1995, the first employee to get a pension equal to half of his pay will be one who retires in 2030. Maximum pension admissible to him will be Rs. 3,250 p.m. at that time..................
| *Considerations of risk and vulnerability are key to understanding the dynamics leading to perpetuating poverty. Poverty is more than inadequate consumption or inadequate education and health — It is also fear for the future. Vulnerability affects everyone but is greater for the poor who face large risks from shocks to their income-earning capacity due to natural and man-made disasters, crime and violence, unemployment, old age, exclusion and discrimination, gender inequality etc. In short, the poor need to feel empowered with skills and voices to overcome their fear of isolation. And governments need to be able to respond to risks through a series of market and non-market mechanisms that do not adversely affect long-term development. More|
The umbrella legislation relating to provident fund is the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act). The Act was enacted with the main objective of making some provisions for the future of industrial workers after their retirement and for their dependents in case of death. It provides insurance to workers and their dependents against risks of old age, retirement, discharge, retrenchment or death of the workers. It is applicable to every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette and employing 20 or more persons.
However, the Act shall not apply to any establishment:-
The Act is administered by the Government of India through the Employees' Provident Fund Organisation (EPFO). EPFO is one of the largest provident fund institutions in the world in terms of members and volume of financial transactions that it has been carrying on. It is an autonomous tripartite body under the control of Ministry of Labour with its head office in New Delhi. It aims to extend the reach and quality of publicly managed old-age income security programs through its consistent efforts and ever-improving standards of compliance and benefit delivery system to its members. This way it seeks to contribute to the economic and social well-being of the country.
EPFO functions under the overall superintendence of the policies framed by the Central Board of Trustees, headed by Union Minister for Labour as Chairman. The main functions of the Board are :-
The main provisions of the Act are:-
Welcome to the PFRDA's website
PFRDA was established by Government of India on 23rd August, 2003. The Government has, through an executive order dated 10th October 2003, mandated PFRDA to act as a regulator for the pension sector. The mandate of PFRDA is development and regulation of pension sector in India.
The National Pension System reflects Government's effort to find sustainable solutions to the problem of providing adequate retirement income. As a first step towards instituting pensionary reforms, Government of India moved from a defined benefit pension to a defined contribution based pension system by making it mandatory for its new recruits (except armed forces) with effect from 1st January, 2004. Since 1st April, 2008, the pension contributions of Central Government employees covered by the National Pension System (NPS) are being invested by professional Pension Fund Managers in line with investment guidelines of Government applicable to non-Government Provident Funds.
Twenty eight (28) State/UT Governments have also notified the National Pension System for their new employees. Of these, 24 states have already signed agreements with the intermediaries of the NPS architecture appointed by PFRDA for carrying forward the implementation of the National Pension System. The other States are in the process of finalisation of documentation.
NPS has been made available to every citizen from 1st May, 2009 on a voluntary basis. The NPS architecture is transparent and will be web-enabled. It would allow a subscriber to monitor his/her investments and returns under NPS, the choice of Pension Fund Manager and the investment option would also rest with the subscriber. The design allows the subscriber to switch his/her investment options as well as pension funds. The facility for seamless portability and switch between PFMs is designed to enable subscribers to maintain a single pension account throughout their saving period.
PFRDA has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the PFMs. The NPS Trust is composed of members representing diverse fields and brings wide range of talent to the regulatory framework.
The National Pension System has been designed to enable the subscriber to make optimum decisions regarding his/her future and provide for his/her old-age through systemic savings from the day he/she starts his/her employment. It seeks to inculcate the habit of saving for retirement amongst the citizens.
PFRDA also intends to intensify its effort towards financial education and awareness as a part of its strategy to protect the interest of the subscribers. PFRDA's efforts are an important milestone in the development of a sustainable and efficient voluntary defined contribution based pension system in India.
National Pension Scheme
From Wikipedia, the free encyclopedia
C:\Users\HP\Desktop\nps\npsdetail\jjss pic n video
For the generic concept, see National pension.
PFRDA Logo with original colours
The National Pension System (NPS) is an Indian Government defined contribution based pensionsystem that was launched as on 01.01.2004. Like most other developing countries, India does not have a universal social security system to protect the elderly against economic deprivation. As a first step towards instituting pension reforms, the Government of India moved from adefined benefit pension to a defined contribution based pension system. Apart from offering wide gamut of investment options to employees, this scheme also helps government of India to reduce its pension liabilities.The problem of Annual Pension Liability was so serious that,it was growing @Compound Rate,where as India's Annual Income is growing @Simple Rate.This would have certainly resulted in the entire collapse of Indian Economic System in the Long Run,making India a defaulter in Defined benefit pension payments to its Retired Employees.There was a threat of Pension Expenses being Greater Than,the Annual Income itself. Now, with the introduction of Defined Contribution Plan,threat is reducing slowly & steadily,turning India in to An Economic Super Power of the Future,by increasing the value of Indian Rupee.Unlike existing pension funds of Government of India that offered assured benefits, NPS has defined contribution and individuals can decide where to invest their money. The scheme is structured into two tiers:
Tier-I account: This NPS account does not allow premature withdrawal and was available from 1 May 2009
Tier-II account: The tier-II NPS account permits withdrawal prior to retirement age.
Since 1 April 2008, the pension contributions of Central Government employees covered by the National Pension System (NPS) are being invested by professional Pension Fund Managers in line with investment guidelines of Government applicable to non-Government Provident Funds. A majority of State Governments have also shifted to the defined contribution based National Pension System from varying dates. 28 State/UT Governments have notified the NPS for their new employees. Of these, 5 states have already signed agreements with the intermediaries of the NPS architecture appointed by Pension Fund Regulatory and Development Authority (PFRDA) for carrying forward the implementation of the National Pension System. The other States are in the process of finalization of documentation.
The Pension Fund Regulatory and Development Authority (PFRDA) is the prudential regulator for the NPS.PFRDA was established by the Government of India on 23 August 2003 to promote old age income security by establishing, developing and regulating pension funds. PFRDA has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the Pension Fund Managers (PFMs). The NPS Trust is composed of members representing diverse fields and brings wide range of talent to the regulatory framework. On 18 September 2013 President Pranab Mukherjee gave his assent to PFRDA Bill of 2013, which was passed in the Monsoon Session of Parliament as on 4th in LS & 6th in RS of September 2013.It has now been published in the Gazette of India, Extraordinary, Part-II, Section-1, dated 19 September (Thursday) 2013 as Act No. 23 of 2013. Details are given in www.egazzette.nic.in with respective dates and Acts,under the category of Recent Extra Ordinary Gazettes,having serial no.82 for Ministry of Law and Justice as The Pension Fund Regulatory and Development Authority Act, 2013 & serial no.10 for the Month of September 2013 as the Year. It has been Fortifying India's Financial Future for more than 10 Years & the Total AUMs are Rs.55,000 Crores only, including that of all Central Govt,State Govt & Private Industry Employees of Organised & Unorganised Sectors. Totally there are 55 Lakh Subscribers to NPS on a PAN-India basis.[As per the recent Press Release of www.pfrda.org.in] The PFRDA is the Foundation Stone of Indian Banking & Financial System. The President of India is the Guardian of PFRDA of India, subject to his Financial Emergency Powers, as per the Articles of Indian Constitution.
Coverage and eligibility
NPS was made available to all citizens of India on voluntary basis and is mandatory for employees of central government (except armed forces) appointed on or after 1 January 2004. All Indian citizens between the age of 18 and 55 can join the NPS.
Tier-I is mandatory for all Govt. servants joining Govt. service on or after 01.01.2004. In Tier I, Govt. servants will have to make a contribution of 10% of his Basic Pay, DP and DA which will be deducted from his salary bill every month. The Govt. will make an equal matching contribution. Since 1 April 2008, the pension contributions of Central Government employees covered by the NPS are being invested by professional Pension Fund Managers in line with investment guidelines of Government. However, there will be no contribution from the Government in respect of individuals who are not Government employees. The contributions and returns thereon would be deposited in a non-withdrawable pension account.
In addition to the above pension account, each individual can have a voluntary tier-II withdrawable account at his option. Government will make no contribution into this account. These assets would be managed in the same manner as the pension. The accumulations in this account can be withdrawn anytime without assigning any reason. It's estimated that 8 crore citizens of India are eligible to join the NPS.
NPS is designed to leverage network of bank branches and post offices to collect contributions and ensure that there is seamless transfer of accumulations in case of change of employment and/or location of the subscriber. It offers a basket of investment choices and Fund managers. Dhirendra Swarup is one of the founders.
There will be one or more Central Recordkeeping Agency (CRA), several Pension Fund Managers (PFMs) to choose from which will offer different categories of schemes. The participating entities (PFMs, CRA etc.) would give out easily understood information about past performance and regular Net asset values, so that the individual would be able to make informed choices about which scheme to choose. PFMs would share a common CRA infrastructure. The PFMs would invest the savings people put into their PRAs, investing them in three asset classes, equity (E), government securities (G) and debt instruments that entail credit risk (C), including corporate bonds and fixed deposits.
The following contribution guidelines have been set by the PFRDA:
Minimum amount per contribution: Rs. 500 per month
Minimum number of contributions: 1 in a year
Minimum annual contribution: Rs 6,000 in each subscriber account.
If the subscriber is unable to contribute the minimum annual contribution, a default penalty of Rs.100 per year of default would be levied and the account would become dormant. In order to re-activate the account, subscriber will have to pay the minimum contributions, along with penalty due. A dormant account will be closed when the account value falls
Under the investment guidelines finalized for the NPS, pension fund managers will manage three separate schemes, each investing in different asset class. The three asset classes are equity, government securities and credit risk-bearing fixed income instruments. The subscriber will have the option to actively decide as to how the NPS pension wealth is to be invested in three asset classes:
E Class: Investment would primarily be in Equity market instruments. It would invest in Index funds that replicate the portfolio of either BSE Sensitive index or NSE Nifty 50 index.
G Class: Investment would be in Government securities like GOI bonds and State Govt. bonds
C Class: Investment would be in fixed income securities other than Government Securities
* Liquid Funds of AMCs regulated by SEBI with filters suggested by the Expert Group
* Fixed Deposits of scheduled commercial banks with filters
* Debt securities with maturity of not less than three years tenure issued by bodies Corporate including scheduled commercial banks and public financial institutions
Credit Rated Public Financial Institutions/PSU Bonds
Credit Rated Municipal Bonds/Infrastructure Bonds
In case the subscriber does not exercise any choice as regards asset allocation, the contribution will be invested in accordance with the 'Auto choice' option. In this option the investment will be determined by a predefined portfolio. At the lowest age of entry (18 years) the auto choice will entail investment of 50% of pension wealth in "E" Class, 30% in "C" Class and 20% in "G" Class. These ratios of investment will remain fixed for all contributions until the participant reaches the age of 36. From age 36 onwards, the weight in "E" and "C" asset class will decrease annually and the weight in "G" class will increase annually till it reaches 10% in " E", 10% in "C" and 80% in " G" class at age 55. The following table will illustrates this auto choice more clearly-
Till the of age 35 years
At age 55 Years
NPS levies extremely low Investment management charge of 0.00010% on net AUM (Asset Under Management). This is extremely low as compared to charges levied by mutual funds or other investment products. Initial charge of opening the account would be Rs. 470. From second year onwards the minimum charge would be Rs. 350 a year, as per the offer document of NPS.
If subscriber exits before 60 years of age, he/she has to invest 80% of accumulated saving to purchase a life annuity from IRDA regulate life insurer. The remaining 20% may be withdrawn as lump sum. On exit after age 60 years from the pension system, the subscriber would be required to invest at least 40% of pension wealth to purchase an annuity. In case of Government employees, the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. If subscriber does not exit the system at or before 70 years, account would be closed with the benefits transferred to subscriber in lump sum. If a subscriber dies, the nominee has the option to receive the entire pension wealth as a lump sum. Recent changes permit subscriber to continue to remain invested after 60 and up to 70 but subscriber can no longer add further investments. Subscriber to intimate the period of deferment and can not withdraw during the deferment period. If the subscriber does not exit by 70, the lumpsum will be monetised and transferred to subscriber's bank account.
The offer document of NPS does not specify the tax benefits in elaborate manner. It specifies "Tax benefits would be applicable as per Income Tax Act, 1961 as amended from time to time." As per current provisions, withdrawals under the NPS attract tax under the EET (exempt-exempt-taxable) system, which means that while contributions and returns to the NPS are exempt up to a limit, withdrawals would be taxed as normal income (EET).
While the NPS subscribers are directly benefited from one of these Income tax concessions, the second one is beneficial to the employers who contribute for NPS each month equivalent to employees contribution in Tier I.
Income tax concession to Employees under NPS:
So far, the contribution made by a National Pension System subscriber in Tier I scheme is deductible from the total income under Section 80CCD of the Income Tax Act. Like wise, the contribution made by the employer for the employee in Tier I of National Pension System is also deductible under Section 80CCD. However, the aggregate deduction under Section 80C, 80CCC and 80CCD is fixed at Rs.1 lakh.
So, if the NPS subscriber already has other eligible deductions such as LIC premium, PPF, bank or NSC deposits, ELSS etc., under Section 80C, 80CCC and Section 80CCD., deduction allowed under Section 80CCD in respect of National Pension System may not be of much use as the overall limit of savings eligible for deduction is pegged at Rs. 1 lakh.
Further, contribution made by the National Pension System should also be included in the Total income of NPS subscriber as far as calculation of income tax is concerned, while full deduction of the same from income under Section 80CCD may not be possible as other savings made by the subscriber covers the overall limit of Rs.1 lakh under Section 80CCD. Hence, for a NPS subscriber contribution for NPS by the Government is taxable in most of the cases.
For example, if an employee receives a salary of Rs.40,000 (pay+da), 10% of the same (Rs.4000) is paid by him as contribution towards NPS. The Government will also be paying Rs.4000 in this case in NPS fund of the said employee. Until now, an amount of Rs.96,000 (Rs.48,000+Rs.48000) could be deductible from the total income as far as this employee is concerned under Section 80CCD.
However, if the said employee has been paying LIC premium of Rs.20,000 per year, he will be allowed to deduct only Rs.4000 in respect of the same under Section 80CC as total ceiling of Rs.1,00,000 under Section 80CCE will apply in this case. So, an eligible deduction of Rs.16,000 could not be availed under Section 80CCD. In other words, employer contribution to NPS to an extent of Rs.16,000, which is already included in the income is taxable in this case.
However, the Finance Act, 2011 amended section 80CCE so as to provide that the contribution made by the Central Government or any other employer to the pension scheme under section 80CCD shall be excluded from the limit of one lakh rupees provided under section 80CCE. This proposal is effective from the assessment year 2012-13 (financial year 2011-12) and would totally exempt employer's contribution in NPS from levying income tax on the employee.
Income tax concession to Employers under NPS:
The Finance Act, 2011 amended section 36 so as to provide that any sum paid by the assessee as an employer by way of contribution towards a pension National Pension System(NPS) to the extent it does not exceed ten per cent of the salary of the employee, shall be allowed as deduction in computing the income under the head "Profits and gains of business or profession".
This amendment will be effective from 1 April 2012 and will be applicable to the assessment year 2012-13 (for the income earned in the financial year 2011-12) and subsequent years.
Past investment returns
The NPS architecture has been managing money since April 2008. Rs.2100 crore is invested as corpus of Central Government employees. In 2008-09, as per unaudited results of the Pension Funds, the average weighted return on the corpus have been over 14.5% with the individual returns of three Pension Funds varying from 12% to 16% on the NPS corpus during the year 2008-09, weighted average return being over 14.5 per cent. According to the latest data released by the government in Parliament on 23 August 2011, return on investment is as low as 1.8% in case of those private sector employees, who opted for investments in government securities, the safest of the categories. The performance of the three pension fund managers for the central government employees indicate that the returns on subscribers' contributions under NPS ranged between 8% and 16% during 2008-09 and 2010-11.
Swavalamban Yojana As mentioned in the operating guidelines issued by MoF, "Government will contribute Rs. 1000 per year to each NPS account opened in the year 2010-11 and for the next four years, that is, 2011-12, 2012-13, 2013-14 & 2014-15. As a special case and in recognition of their faith in the NPS, all NPS accounts opened in 2009-10 will be entitled to the benefit of Government contribution under this scheme as if they were opened as new accounts in 2010-11 subject to the condition that they fulfill all the eligibility criteria prescribed under these guidelines."
Accordingly, the basic eligibility criteria for joining the Swavalamban Yojana for a subscriber is given below: Permanent Retirement Account should be opened in the year 2009-10 or 2010-11 and Minimum contribution should be Rs. 1,000 per annum (Financial year) in Tier I account and maximum contribution should be Rs. 12,000 per annum (Financial year) in both Tier I as well as Tier II account together.
India's pension reforms: A case study in complex institutional change by Surendra Dave, page 149–170 in `Documenting reforms: Case studies from India', edited by S. Narayan, Macmillan India, 2006.
Indian pension reform: A sustainable and scalable approach by Ajay Shah, Chapter 7 in `Managing globalisation: Lessons from China and India', edited by David A. Kelly, Ramkishen S. Rajan and Gillian H. L. Goh, World Scientific, 2006.
Employees' Pension Scheme, 1995 :.