National Pension Scheme Now Mandatory – RRB Employees
The long wait of Regional Rural Bank employees to get at par pension (compared to Nationalized Banks) has been approved by Government of India on 13th August 2018, after Supreme Court verdict on at par pension in April 2018.
Meeting was held between Department of Financial Services (DFS) with senior officials of NABARD and sponsor Bank of Regional Rural Banks who own 50% in them. It has been decided that Staff joining Bank after 31st March 2018 will be under the ambit of National Pension Scheme. All staff who joined the bank before that date will be eligible for pension. With This RRB’s will be the last government organization where pension is implemented till 31-03-2018. In Central Government jobs pension NPS was implemented in 2004 and in Nationalized banks it was implemented in 2010.
What effect will it bring in Pension?
Currently over 27000 retired RRB employees get a shameful pension of Rs.1500-2500 per month but after the implementation of national pension scheme for new employees and old pension scheme for old employees, the pension will revise to around Rs. 35000.
How will banks manage this burden?
With this announcement, Diwali is being celebrated among all pensioners and current employees of the bank. But at the same time this will bring an additional burden over regional rural banks which are small and are inadequately capitalized. To manage this burden a direct intervention from government and recapitalization of Regional Rural banks will be required.
What is the contribution in NPS scheme
In NPS Scheme. 10% of your gross salary(- HRA) is deducted. The same is also contributed by the employer in your PRAN number. Suppose your salary is Rs.50000 then NPS deducted from your salary will be Rs.5000 and an equal amount will be contributed by the bank. A total of Rs. 10000 will be deposited in your NPS account by the bank.
How your Investment in NPS Scheme earns?
Your investment in NPS scheme is distributed in 2 parts i.e. 50-50%. One half is kept at an annual interest fixed by the government which is about 8%, the other half is invested in different government projects in which you can yield higher return.
What is the difference between Old pension Scheme and NPS Scheme?
In Old pension scheme the bank will pay you monthly pension which depends on your last basic and Dearness allowance. A minimum service tenure is required in case of old pension scheme. Where as in NPS, your are free to decide. You can either opt for pension or take entire money invested in NPS in one go. Pension in NPS is made by distribution of your investment for a fix period. Suppose you want pension for 15 years i.e. 180 months so you investment will be distributed in 180 months and your equivalent monthly enrolment will be paid.
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