NEW DELHI: The Centre is likely to follow the Andhra model of guaranteed pension scheme while making the changes in the New Pension System (NPS) for government employees, sources told this paper.
According to officials, the committee headed by finance secretary T V Somanathan that is looking into the NPS, is considering a scheme under which employees will get guaranteed 40-50% of their last drawn basic salary.
“The proposed scheme will be market-linked. If there is a shortfall in the corpus, the government will fill the gap and make sure that the pensioners get 40-50% of their last drawn salary,” a top government official said. Under the proposed scheme, the employees will have to make contribution as they used to earlier but the government’s contribution will increase. Currently, employees contribute 10% of their basic salary to NPS while the government puts in 14% towards the employees’ NPS account.
However, it is not clear if the new scheme will be inflation-linked like the Andhra scheme. “We can’t revert to the old pension scheme as it will put fiscal pressure on the exchequer. The altered scheme will remain linked to the market but the gap will be filled by the government,” the official said. As per sources, the next meeting of the committee is likely to take place next month to deliberate on the issue.
“There is a lot of pressure from states including from BJP-ruled states to amend the new pension scheme. BJP-ruled states also want the proposed scheme similar to the old pension scheme to woo voters before elections,” another official stated.
Inflation-linked scheme
Under Andhra’s guaranteed pension scheme, pensioners will get 50% of their last drawn basic salary along with DA, which is linked to inflation