Chhattisgarh has change into the primary state to inform restoration of outdated pension scheme (OPS) to supply assured earnings to retired workers. The state has additionally despatched an in depth proposal to Pension Fund Regulatory and Growth Authority (PFRDA) to withdraw ‘17,000 crore accrued beneath the market-driven Nationwide Pension System (NPS) since November 2004.

The Chhattisgarh authorities, on Thursday, issued a Gazette notification switching again to OPS from NPS. The OPS has change into efficient from April 1, 2022. The notification says, “The ten% deduction for month-to-month contribution from the wage of presidency servants beneath the brand new contributory pension scheme might be abolished from April 1, 2022 and a minimal of 12% of the fundamental wage might be deducted as per the Common Provident Fund rule.” Although Rajasthan had introduced restoration of OPS in its Price range in February, the state has not issued a Gazette notification.

In accordance with sources, the federal government has sought withdrawal of funds accrued from workers’ and state authorities contributions to PFRDA. A senior state finance division official, who didn’t want to be recognized, informed ET, “We now have despatched an in depth proposal looking for withdrawal of funds accrued since November 2004 — when Chhattisgarh had joined NPS.” Chhattisgarh authorities has proposed that workers’ contributions accrued be deposited in Common Provident Fund (GPF) in order that the workers can withdraw the funds for exigencies. The state authorities has proposed to arrange a separate Pension Fund the place the contribution could be transferred. . This might be invested in several government-approved devices. The official mentioned, “The federal government will deposit 4% of the earlier fiscal’s pension contribution on this Pension Fund additionally yearly which might be used to foot the pension invoice in future.”

The same request from Rajasthan authorities has been rejected leaving the state in a quandary. The official quoted above mentioned, “Our proposal is totally different from Rajasthan authorities’s and we hope to get the approval from PFRDA.”

Below the Previous Pension Scheme, the federal government offers 50% of the wage of an worker as pension on the time of retirement. Since this method places a monetary burden on the Exchequer, the Centre had launched the contributory New Pension System (NPS). Rajasthan and Punjab governments have been the primary to signal an settlement and rollout this method on April 1, 2004. Below NPS, 10% is deducted from the wage and an equal proportion is contributed by the employer. The contributions are invested in bonds and securities. If an worker takes voluntary retirement scheme, she will be able to withdraw 20% of the quantity accrued however reinvest 80% and if the worker retires, she will be able to withdraw 60% however has to reinvest 40%.

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