7th Pay Commission: National Pension System withdrawal, pension choice, other new rules explained
7th Pay Commission: Lakhs of central and state government employees have been protesting against the rules of New Pension Scheme (NPS). The continuous protest by the employees had put the government on the back-foot. However, the government has made some favourable changes keeping in mind the demands of the employees. Minister of State for Finance Shiv Pratap Shukla explained the new rules and benefits in Rajya Sabha on Tuesday. The government has also enhanced the mandatory contribution by the Centre for its employees covered under NPS Tier-I from the existing 10% to 14%. The new rules will benefit over 18 lakh central government employees. Read on to check the details:
New Pension Scheme Fund: Premature withdrawal
7th Pay Commission: The government has allowed premature withdrawal from New Pension Scheme Fund. A subscriber is eligible for three partial withdrawals during the period of subscription under National Pension System (NPS), each withdrawal not exceeding twenty-five percent of the contributions made by the subscriber and excluding contributions made by the employer. There is, however, no restriction on withdrawals from the Tier-II account of the subscriber. (IANS)
National Pension System: New withdrawal time frame
7th Pay Commission: Keeping in view the possibility of sudden financial needs of the subscribers, the requirement of the minimum period under National Pension System (NPS) for availing the facility of partial withdrawal from the mandatory Tier-I account of the subscriber has been reduced from 10 years to 3 years from the date of joining w.e.f. 10th August, 2017. The minimum gap of 5 years between two partial withdrawals has also been removed w.e.f. 10th August, 2017. (Agencies)
National Pension System: Choice of Pension Fund
7th Pay Commission: Central Government subscribers will be allowed to choose any one of the pension funds including Private sector pension funds. They could change their option once a year. However, the current provision of a combination of the Public-Sector Pension Funds will be available as the default option for both existing as well as new Government subscribers. (PTI)
National Pension System: Choice of Investment Pattern
7th Pay Commission: The following options for investment choices will be offered to Central Government employees: (a). Government employees who prefer a fixed return with a minimum amount of risk may be given an option to invest 100% of the funds in Government securities (Scheme G). (b). Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes. (b).(i) Conservative Life Cycle Fund with maximum exposure to equity capped at 25% at the age of 35 years and tapering off thereafter (LC-25). (b).(ii) Moderate Life Cycle Fund with maximum exposure to equity capped at 50% at the age of 35 years and tapering off thereafter (LC-50). (PTI)
National Pension System: Default Allocation Option
In case an employee does not submit any choice, the existing allocation of funds shall continue as the default option. (PTI)