look news india
To reduce the burden on the Government due to implementation of UPS for providing pension to employees recruited from 2004, the Government is likely to use the pooling mechanism and will not reset the basic pension after each Pay Commission award.
Such a report has been published in an English newspaper. Under the old pension scheme, the basic pension was reset after each award of the Pay Commission. Explaining the pulling mechanism, sources said that individual accounts of employees will not be maintained under this new scheme. According to the report, in case of employees retiring under UPS in 2036 or thereafter and the death of pensioners or their family beneficiaries during this period, the scheme does not provide for transfer of pension capital amount in the account to their heirs in such a situation. Since the scheme does not provide for the maintenance of individual accounts of employees, this is the opinion of the informants. Sources are telling that doing so will help the government to give assured pension without making any major provision in the budget. Individual accounts are maintained under the existing NPS till the implementation of UPS. A maximum of 60 per cent of the total amount deposited in the employee's account from the contributions made by an employee while still employed is allowed to be withdrawn at the time of retirement under NPS and without any tax by the employee as a subscriber of NPS. At least 40 percent of the amount collected from one's contribution has to be invested in securities so that the concerned employee can get regular pension from the returns on these securities. However, there is no guarantee of how much pension will be received under NPS, because the return on investment depends on the market.
