The Government signed memorandum of understandings (MoUs) with New Pension System Trust and National Securities Depository Ltd regarding the new scheme. Finance Secretary M R Sreenivasa Murthy and N R Rayalu, Managing Trustee and Chief Executive Officer of NPS Trust signed the agreement in Chief Minister Yeddyurappa’s presence.
Those joined the service before April 1, 2006 were getting monthly pension after retirement. The State government, while implementing recommendations of the fifth pay commission, decided to introduce the new pension system.
As per the new project the monthly contribution from employees will be 10 per cent of basic pay and dearness allowance. The government will contribute the equal amount to the employees’ account. The contributions will be deposited with the pension fund. On superannuation the employees will have to purchase an annuity investing about 40 per cent of their total pension sum. Based on the annuity, employees and their dependents get pension.
The new scheme would be operational from February this year. Rayalu said each employee would be free to invest his savings in the market. Yeddyurappa said the similar scheme had been in effect for employees of the Union government since April 1, 2004.
The Pension Fund Regulatory and Development Authority of the Centre had appointed SBI Pension Fund, UTI Retirement Solutions and LIC Pension Fund - the three pension fund managers for the scheme. National Securities Depository Limited is the central record keeping agency in the scheme. Visit - www.pfrda.org.in and www.npscra.nsdl.co.in