Governance
Recently,
Rajasthan and Chhattisgarh announced the restoration of the old pension scheme
(OPS) for government employees for the year 2022- 2023.
NPS vs OPS:
·
The old pension scheme was done away with in
December 2003 by the BJP-led central government When the Atal bihari Vajpayee
was prime minister.
·
Its substitute, the
National Pension Scheme (NPS), took effect from April 1, 2004.
·
New Pension Scheme Old
Pension Scheme In the NPS, the government and employees contribute an equal
portion towards the pension fund.
·
The old pension scheme was outlined as opposed to the
investment return-based NPS.
·
The minimum payment to
retired employees as pension is ₹3,500 in the NPS The old scheme provided 50%
of the last drawn salary as the pension.
·
NPS provides a pension
fund on retirement which is 60 per cent tax-free on redemption while the rest
needs to be invested in annuity which is fully taxable.
·
Income from OPS is not
taxed. Pension Fund Regulatory and Development Authority: It is the statutory
Authority established by an enactment of the Parliament, to regulate, promote
and ensure orderly growth of the National Pension System (NPS).
·
It works under the Department of financial Services under the
Ministry of Finance.
·
It performs the
function of appointing various intermediate agencies like Pension Fund Managers,
Central Record Keeping Agency (CRA) etc.
It develops, promotes
and regulates the pension industry under the NPS and also administers the Atal
Pension Yojana.
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