Family Pension and Invalid Pension under New Pension System.

Govt of India has extended the benefit of family pension to the family's of employees covered under NPS, in case of their untimely death before the retirement. In case of invalidation of employees, employees will become eligible for invalid pension. The calculation of pension in both cases would be according to the 1972 pension provisions. But this benefit is provisional as the new rules are being framed. Even after the new rule, some kind of regular pension is expected in case of above circumstances.

As NPS is notified by cabinet to NVS employees, all the alllied rules also come into effect automatically. Suppose a senior employee unfortunatley looses his life, what his family gets under CPF is less than 10 lakh rupees. What will happen to his family? Had he opted for NPS, his family would be secure. We need to think about this a lot in Samiti. We have around 25 per cent employees who are going to retire within a decade. What will happen to them, if we all madly reject NPS. Are we capable of getting 1972 regular pension? Do we have it in us to go for strike?

We need to keep in mind another fact too. Already 10 per cent of us are covered under NPS.Ten per cent of vacancies are there in samiti. Another 15 per cent will retire in five years. We have been mute witnesses to the inner fights across the regions and unions! We know the fear factor that has been injected into our cadres! Inspite of all these things, is it ok to be positive? We all need to seriously ponder over these things.

United Struggle for GOI Pension for Navodaya Employees

It's a good news for all the employees of the samiti irrespective of the cadre. Two factions of ainvsa came together along with principal's forum and other unions with single point agenda of getting GOI Pension. Now we can hope for some movement in that direction.
JAC decided to observe the Teachers Day as HUNGER WORK DAY to draw the attention of the authorities to the dire need of GOI Pension to Navodaya Employees. All the employees will work on that day with at most dedication but FASTING THE WHOLE DAY. All the units should publicize this at their level best.

The following are the members of the JAC:
1. Sri V L Balasubramanian, JNB Kasaragod
2. Sri R.S. Naik, JNV Kanacona
3. Sri T.P. Mani, JNV Kollam
4. Sri L.B. Reddy, JNV Warangal
5. Sri J.K. Singh, JNV Katihar
6. Sri Jagadeesh Rai,
7. Sri Shiv Narayan Sharma, RO Chandigarh
8. Sri Vijaya Kumar,JNV
9. Smt Sunitha Bhatt, RO Chandigarh
10. Sri P Rajesh, JNV Kasaragod
11. Sri P K Guptha, JNV Ratibad
12. Sri S S Dora, JNV Angul
14. Sri Yogendra Kumar Sharma, JNV Kotiya
15. Sri Gajendra Kumar, JNV Mahendragarh
16. Ms Mary k P, JNV Hoshangabad

A delegation consisting of 11 members of JAC called on the Hon Minister Sri Kapil Sibalji, MHRD on 10th evening at 7.30pm and submitted the memorandum. He promised that he would look into the matter. You can read my previous posts how much pension you would get under nps and Navodaya employees got pension.

New Pension System notified by Samiti

New Pension System was notified by samiti last week and employees who were appointed prior to 1/4/2004 should exercise their option with in three months. Many employees are confused about the system as NPS is a noval product. All the senior employees got disappointed as they could not get GOI pension. Majority lack a clear understanding of the NPS and its architecture. In order to decide the pros and cons one must understand the product first. I think you can get all your doubts cleared at pension fund regulators site
There is one important positive of NPS. In old system 10 per cent of basic pay was the contribution from the employee and the employer. Under NPS, both contribute 10 per cent of Basic Pay+Grade Pay+Dearness Allowance. For an employee who is two or three decades away from retirement, the contribution from Samiti will be far higher than that of Samiti's contribution under CPF as it is restricted to 10 per cent of Basic Pay and Grade Pay and Dearness Allowance is not considered.. Please read my post:"how much pension you would get: for further information and links for calculations.

How much pension you would get?

Government of India decided to adopt New Pension Plan for NVS employees. Presently under CPF system, 10 per cent of basic pay is subscribed by the employee and the same amount is added by NVS. Under the new system, one has to pay 10 percent of basic and dearness allowance and the same amount will be added by NVS. The other big difference is transparency and empowerment that comes to you to manage your own money. Presently the return is pegged with the rate of interest decided for EPFO. Which is paltry considering the rate of return that could be generated with proper allocation to equity. Many employees out rightly reject the idea of new pension plan. Before taking a decision, proper study is required. If you take an example of 30 year old employee, whose basic salary stands at 20000 with expected average annual increase of 3 percent, will fetch him less than a crore as his retirement fund. (Taking average rate of 8 percent) Under new system the retirement corpus would be less than 5 crore. As the Dearness Allowance is also included for the subscription the expected average annual increase in the salary amount can be presumed at 8 percent. Over the long term equity would usually fetch 15 percent (there is great deal of historical evidence to prove that point). If you want to calculate your own retirement corpus, you can do it here.
Out of the retirement corpus, 6o percent of it can be taken back by you. Remaining 40 percent you have to hand over to an insurance company for your pension. You can customize it as per your requirement. All that will be done based on the interest rate at the time of your retirement. So what worries many of us may be lack of fixed amount. Who knows we get more than what we would get under the old policy? All of us need to do lot of home work! The first step is to get acquinted with the new system. You can do it at pension portal of govt of india.