The transfer is more likely to put a burden of Rs 1,000 crore on the state exchequer.
Though the OPS was stopped from January 1, 2004, and the workers becoming a member of the service after that have been coated below the NPS, the Congress get together had promised within the 2022 Assembly polls to return to the OPS
The Himachal Pradesh authorities has lastly gone again to the previous pension scheme (OPS), as an alternative of the nationwide pension scheme (NPS), from April 1. Though the OPS was stopped from January 1, 2004, and the workers becoming a member of the service after that have been coated below the NPS, the Congress get together had promised within the 2022 Assembly polls to return to the OPS.
A notification on this regard has already been issued by Himachal Pradesh Chief Secretary Prabodh Saxena on April 17. “In view of the Cabinet Decision for the implementation of the previous pension scheme below the CCS (Pension) Rules 1972, the state authorities has determined that contributions of the state authorities staff (worker’s and employer’s share) coated below the National Pension System shall be stopped with impact from April 1, 2023,” the according to the notification.
The move will benefit both retired and serving employees, and those with over 20 years of service will be entitled to a pension of 50 per cent of basic pay and DA. The move is likely to put a burden of Rs 1,000 crore on the state exchequer.
Earlier this year, after the Himachal Pradesh government had decided to restore OPS, Chief Minister Sukhvinder Singh Sukhu after a Cabinet meeting had said, “The aim of the government is to provide social security to all. We have decided to implement OPS from the point of view of social security and humanity. The affordability of OPS expenditure will be achieved through financial discipline and cutting down on expenses and we believe that there is no such thing which cannot be done.”
New Pension Scheme Vs Old Pension Scheme
The previous pension scheme, known as the Defined Benefit Pension System (DBPS), relies on the final pay drawn by the worker. The NPS is referred because the Defined Contribution Pension System (DCPS), by which the employer and worker contribute to construct a pension wealth payable on the time of retirement by means of annuity/lumpsum withdrawal as per norms.
Under the OPS, the worker might withdraw 50 per cent of the last-drawn wage as pension after the retirement.
Under the NPS, an individual is allowed to withdraw 60 per cent of the collected corpus contributed throughout his/ her working years on the time of retirement, which is tax-free. The remaining 40 per cent is transformed into an annuatised product, which might at present present the individual with a pension of 35 per cent of his/ her last-drawn pay.
The NPS is relevant to all staff becoming a member of companies of the central authorities, together with central autonomous our bodies (besides Armed Forces) on or after January 1, 2004. Many state governments have additionally adopted NPS structure and carried out NPS mandatorily for his or her staff becoming a member of on or after a closing date.
In the case of pre-mature exit below the National Pension System, a minimum of 80 per cent of the collected pension wealth of the subscriber must be utilised for buy of an annuity offering the month-to-month pension to the subscriber and the stability is paid as a lump sum to the subscriber.
The NPS is relevant to all staff becoming a member of companies of the central authorities, together with central autonomous our bodies (besides Armed Forces) on or after January 1, 2004. Many state governments have additionally adopted NPS structure and carried out NPS mandatorily for his or her staff becoming a member of on or after a closing date.
Under the scheme, subscribers may proceed to contribute to the NPS past his/ her retirement, as much as 70 years of age, and avail extra tax profit on the contribution.
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