14 percent of the Basic Pay plus DA by the Central Government Contribution in NPS - Gazette Notification
The
monthly contribution would be 10 percent of the Basic Pay plus Dearness
Allowance (DA) to be paid by the employee and 14 percent of the Basic
Pay plus DA by the Central Government
MINISTRY OF FINANCE
(Department of Financial Services)
NOTIFICATION
New Delhi, the 31st January, 2019
F.
No. 1/3/2016-PR - In partial modification of para 1(i) of Ministry of
Finance’s Gazette Notification No. 5/7/2003-ECB-PR dated 22nd December,
2003, based on the Government’s decision on 6th December, 2018 on the
recommendations of a Committee set up to suggest measures for
streamlining the implementation of National Pension System (NPS), the
Central Government makes the following amendments in the said
notification, namely :-
(1) In para 1(i) of the said
notification, for the words “The monthly contribution would be 10
percent of the salary and DA to be paid by the employee and matched by
the Central Government”, the words “The monthly contribution would be 10
percent of the Basic Pay plus Dearness Allowance (DA) to be paid by the
employee and 14 percent of the Basic Pay plus DA by the Central
Government” shall be substituted.
(2) The following provisions shall be inserted after para 1(v) of the said notification, namely:-
CHOICE OF PENSION FUND AND INVESTMENT PATTERN IN TIER-I OF NPS AS UNDER:
(vi)
Choice of Pension Fund: As in the case of subscribers in the private
sector, the Government subscribers may also be allowed to choose any one
of the pension funds including Private sector pension funds. They could
change their option once in a year. However, the current provision of
combination of the Public-Sector Pension Funds will be available as the
default option for both existing as well as new Government subscribers.
(vii) Choice of Investment pattern: The following options for investment choices may be offered to Government employees :
- The existing scheme in which funds are allocated by the PFRDA among
the three Public Sector Undertaking fund managers based on their past
performance in accordance with the guidelines of PFRDA for Government
employees may continue as default scheme for both existing and new
subscribers.
- Government employees who prefer a fixed return with minimum amount
of risk may be given an option to invest 100% of the funds in Government
securities (Scheme G).
- Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes.
(A) Conservative Life Cycle Fund with maximum exposure to equity capped at 25% - LC-25.
(B) Moderate Life Cycle Fund with maximum exposure to equity capped at 50% - LC-50.
(viii)
Implementation of choices to the legacy corpus: Transfer of a huge
legacy corpus of more than Rs. 1 lakh crore in respect of the Government
sector subscribers from the existing Pension Fund Managers is likely to
impact the market. It may be practically difficult for the PFRDA to
allow Government subscribers to change the Pension Funds or investment
pattern in respect of the accumulated corpus, in one go. Therefore, for
the present, change in the Pension Funds or investment pattern may be
allowed in respect of incremental flows only.
(ix)
Transfer of legacy corpus in a reasonable time frame: PFRDA may draw up a
scheme for transfer of accumulated corpus as per new choices of
Government subscribers in a reasonable time frame of say five years.
Once PFRDA draws up this scheme, change in the Pension Funds or
investment pattern may be allowed in respect of the accumulated corpus
in accordance with that scheme.
4 THE GAZETTE OF INDIA :
EXTRAORDINARY [PART I-SEC. 1] COMPENSATION FOR NON-DEPOSIT OR DELAYED
DEPOSIT OF CONTRIBUTIONS DURING 2004-2012:
(x) In all
cases, where the NPS contributions were deducted from the salary of the
Government employee but the amount was not remitted to CRA system or was
remitted late, the amount may be credited to the NPS account of the
employee along with interest for the period from the date on which
the
deductions were made till the date the amount was credited to the NPS
account of the employee, as per the rates applicable to GPF from time to
time, compounded annually.
(xi) In all cases where the
NPS contributions were not deducted from the salary of the Government
employee for any period during 2004-2012, the employee may be given an
option to deposit the amount of employee contribution now. In case he
opts to deposit the contributions now, the amount may be deposited in
one lump sum or in monthly installments. The amount of installment may
be deducted from the salary of the Government employee and deposited in
his NPS account. The same may qualify for tax concessions under the
Income Tax Act as applicable to the mandatory contributions of the
employee.
(xii) In all cases where the Government
contributions were not remitted to CRA system or were remitted late
(irrespective whether the employee contributions were deducted or not),
the amount of Government contributions may be credited to the NPS
account of the employee along with interest for the period from the date
on which the Government contributions were due till the date the amount
is actually credited to the NPS account of the employee, as per the
rates applicable to GPF from time to time. Instructions to this effect
may be issued by the Department of Expenditure/ Controller General of
Accounts. All such cases of delay may be resolved within a period of
three months.
The above provisions shall come into force with effect from 1st April, 2019.
MADNESH KUMAR MISHRA, Jt. Secy.
Note :
The main notification was published in the Gazette of India,
Extraordinary, Part-I, Section 1, vide notification No. 5/7/2003-PR
dated the 22nd December, 2003
