FAQ regarding New Pension Scheme in Ordnance Factories

FAQ regarding New Pension Scheme in Ordnance Factories:-

OFFICE OF THE PRINCIPAL CONTROLLER OF ACCOUNTS(FYS)

10-A, S K BOSE ROAD. KOLKATA – 700001

NPS Section

Questionnaire regarding New Pension Scheme :-

1.What is New Pension Scheme ?

A new defined contribution pension system in place of existing defined benefit system, applicable for fresh entrants to Central Government Service from 01-01-2004.

2. When it is started & for whom ?

The system is mandatory for all new recruits to the Central Government Service from 01-01-2004 except the Armed Forces.

3.What is the quantum of the Contribution ?

The monthly contribution to be deducted amounts to 10% of the Basic Pay, Grade Pay and DA to be paid by the employee & matched by the Central Government.

4.What will be the amount of Government Contribution?

It is equal to the individual’s subscription.

5.Is there any maximum limit of the subscription for an individual?

The maximum limit is 10%.

6.When does the NPS subscription start?

Recoveries towards Tier-I contribution start from the salary of the month following the month in which the Government Servant has joined the service. Therefore, no recovery is to be effected for the month of joining.

7.Whether GPF will be available to the subscribers of the NPS ?

The existing provisions of defined benefit pension & GPF would not be available to the new recruits in the Central Government service covered under NPS.

8.How many Tiers are there in the NPS ?

There are two Tiers in the NPS. Tier-I is compulsory & Tier-II is voluntary. Tier-II is a withdrawable account at subscriber’s option. The employee would be free to withdraw part or all of the Tier-II of his money any time. Government will not make any contribution to Tier-II account.

9.When can the subscriber of NPS exit from the system ?

Individual can exit at the date of Superannuation i.e. at the age of 60 years.

10.What amount will be paid to the subscriber of the NPS at the time of retirement?

At exit, the individual would be mandatorily required to invest 40% of the pension wealth to purchase an annuity and balance pension wealth will be paid to him. Individual would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitization would be 80% of the pension wealth.

11.What is the Architecture of the New Pension Scheme ?

In order to implement the scheme there is a Central Record Keeping Agency (National Securities Depository Limited) & several Pension Fund Managers. At this stage there are three PFMs viz. SBI Pension Funds Pvt.Ltd., UTI Retirement Solutions Ltd. & LIC Pension Fund Ltd.

An independent Pension Fund Regulatory & Development Authority (PFRDA) is to regulate and develop the pension market.

12.How & when an employee can contribute to Tier-II of the Scheme ?

An individual can open a Tier-II account with a Nationalized Bank and the contribution will be deposited to the Bank by the subscriber concerned. As Government will not make any contribution to Tier-II account no recoveries will be made from the salaries of the employees on this account.

13.How an employee be a member of the NPS ?

Immediately on joining Government service, the Government servant will be required to provide particulars such as his name, designation, scale of pay, date of birth etc. in the prescribed form viz. S-I form prescribed by the NSDL, Mumbai, and submitted to his DDO. The S-I form shall be submitted by the DDO to his Pay & Accounts Officer. The PAO will forward the S-I form to the NSDL, Mumbai. On receipt of the form, NSDL will allot 12 digit PRAN (Permanent Retirement Account Number) to the subscribers and a PRAN kit will also be forwarded to the subscribers by the NSDL.

14.How will the subscription recovered from the subscribers be remitted to the concerned authorities ?

The subscription of the NPS subscribers will be recovered from his regular pay by the PAO concerned. The PAO will upload the NPS data to the NPSCAN of NSDL & a cheque of the same amount will be remitted to the Trustee Bank appointed by the PFRDA viz. Bank of India after the data has been uploaded to the NPSCAN.

15.What is the investment plan of the NPS ?

The contribution towards pension will be invested in the default Schemes termed as ‘Scheme I’ of various Pension Fund Managers (SBI Pension Funds Pvt. Ltd., UTI Retirement Solutions Ltd. & LIC Pension Fund Ltd.) presently in the proportion of 33%, 32% & 35%, respectively. Each PFM will invest 85% of the contributions received by it in fixed income instruments and 15% in equity & equity related instruments.

16.Whether the individual is entitled for leave encashment after retirement ?

The benefit of encashment of leave salary is not a part of the retirement benefits admissible under Central Civil Services (Pension) Rules, 1972. It is payable in terms of CCS (Leave) Rules which will continue to be applicable to the Government Employees who join the Government Service on or after 01-01-2004. Therefore, the benefit of encashment of leave salary payable to the Government Employees/ to their families on account of retirement/death will be admissible.

17.What happens if an employee gets transferred during the month ? Which office will make deduction of contributions ?

As in the case of other recoveries, the recovery of contributions towards NPS for the full month (both individual & Government) will be made by the office who will draw salary for the maximum period.

18.Who will pay additional relief on death/disability of Government Servants covered by NPS ?

Additional relief on death/disability of Defence Civilians Personnel covered by the New Defined Contribution System (NPS) will be dealt with by PCDA (P) Allahabad.

19.What is the procedure for recovery of NPS contribution in the case of EOL/HPL ?

The subscription of the employee and the Government would be restricted proportionately to the leave salary in case of HPL cases.

In case of EOL since no salary is drawn during this period, no contribution either from employee or from Government would be payable.

20.What is the procedure for recovery of NPS contribution in the case of Suspension cases?

Every subscriber shall subscribe monthly to the NPS when on duty or Foreign Service but not during a period of Suspension.

On exoneration or otherwise, the amount of subscription shall be the emoluments to which he was entitled on the first day after his return to duty.

If a subscriber elect to pay arrears of subscriptions in respect of a period of suspension, the emoluments or portion of emoluments which may be allowed for that period on re-instatement, shall deemed to be emoluments drawn on duty.

21.What is the Time Line of regular upload and Fund Transfer ?

The responsibility for timely remittance to the Trustee Bank is that of the PAO in respect of all the subscribers under his domain. After pre-audit of pay bill the PAO should upload the subscriber contribution details on NPSCAN and obtain the transaction ID by the 25th of each month.

If the remittance is through RTGS/NEFT then it may be ensured that the NPS contributions (Govt. & Employees) should be credited to the account of the Trustee Bank by the PAO on the last working day of each month for that salary month. If the remittance is through a cheque payable to the Trustee Bank, then the same should be delivered to the local branch of the Trustee Bank by the PAO by the 26th of each month marked NPB for the last working day of the month.

source : PC of A (Fys)
via : http://karnmk.blogspot.in/