Govt changes NPS rules, raises family pension for PSB employees | Benefits Explained
New Delhi | Jagran Business Desk: In a major relief for the pensioners of Public Sector Banks (PSBs), the government, earlier this week, announced that it has raised the family pension for bank employees to 30 per cent of the last drawn salary, admitting that the pension of the bank employees is at the paltry level. "The cap has been completely removed and a uniform slab of 30 per cent at the last-drawn salary will be entitled as a family pension," the government said on Wednesday.
Earlier, kin of a deceased PSB employee used to get a maximum of Rs 9,284 per month as a family pension, said Department of Financial Services Secretary Debasish Panda. This would result in the family pensions rise to as high as Rs 30,000-Rs 35,000 a month.
Apart from the increase in pension of bank employees, the government has also decided to increase the employer's contribution in the New Pension Scheme (NPS) to 14 per cent of the salary from the current 10 per cent. Under this, the contribution of banks in the pension fund of employees working in public sector banks is 10 per cent. Now this contribution has been increased to 14 per cent. However, the minimum contribution from the employee's side has been kept fixed at 10 per cent.
The direct effect of the increase in the pension fund by the government will now serve to give relief to the employees on retirement. Under the National Pension System, the contribution by the government for the central employees has been kept at 14 per cent of the basic and dearness allowance and the minimum contribution of the employee has been kept at 10 per cent.
As soon as this rule comes into force, the number of funds that the employees get during retirement will increase. In order to provide relief to the families of bank employees in this way, the government has announced to increase its share in the New Pension System. According to this rule, the Ministry of Finance has agreed to the rule of providing benefits to the families of banking employees even after their death. After the death of bank employees, then his family will get 30 per cent of the last salary as a pension.
Earlier, Finance Minister Nirmala Sitharaman expressed her satisfaction at public sector banks (PSBs) performance in the past few years and appreciated that many of them have come out of the RBI's prompt corrective action framework.
On the government's plans to reduce stakes in insurers, Sitharaman said the government will go down to having minimum holdings in such companies. She also asked the employees not to fear anything saying the government is sensitive about their concerns. When asked about the reports of the government mulling insurance bonds as an alternative to bank guarantees, Sitharaman said it was just a suggestion that had come from the industry.
Posted By: Talibuddin Khan