The Finance Ministry is set to introduce a revamped National Pension Scheme (NPS) for government employees, drawing inspiration from Andhra Pradesh. Under this prospective system, retirees would receive pensions based on 40-50% of their final basic salary. The new scheme would be market-linked, with the government bridging any funding gaps. Employee contributions will remain unchanged, while the government’s contributions will increase. The specifics of the scheme are still being worked out by a committee led by the finance secretary. Some BJP-governed states are pushing for NPS modifications to appeal to voters, mirroring the old pension system. Currently, state and central government employees constitute 79% of the NPS’s Rs 9 lakh crore assets under management. The number of subscribers as of March 31, 2023, stands at 6.3 crore, with 60.72 lakh from state governments and 23.86 lakh from the central government.
Government Plans Pension Reform Modeled on Andhra Pradesh
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