Light at the end of the Tunnel - NPS Implementation is being Streamlined in Samiti

Please click here to read my blog dated 28th January 2011 where it is explained how delay in implementation of NPS in Samiti is resulting in notional losses to the tune of nine to twenty five lakhs of rupees in the retirement corpus of new employees. You can read here how the contributions of new employees until now are not eligible for tax treatment from a legal perspective. Almost an year after I pointed out the huge notional loss (which means the notional losses are even more higher than previously estimated), Samiti seems to be getting its act together. Already employees of HQ and ROs were issued PRANs (PERMANENT RETIREMENT ACCOUNT NUMBER). Now the efforts are on to roll in the staff from Vidyalaya Units. Its going to be a daunting task in view of the lack of basic understanding of NPS among the employees. Samiti needs to take an initiative to educate the employees about the nuts and bolts of the scheme. This blog has also posted a back of the envelope calculation on NPS corpus that can be accumulated. Please click here to read it ,

In the wake of recent judgment of High Court, it makes sense for post 2001 employees who are  two three decades away from retirement to enroll into NPS. Samiti should think of seeking the option once again from those employees who are appointed prior to 2008. Those who are appointed between 2004 and 2008 should enroll themselves into NPS without any hesitation. Its the best option for them.

STRIKE IS CALLED OFF ON ASSURANCE OF TIMEBOUND ACTION

"In view of the assurance given by the Secretary on behalf of the Govt of India the JAC had decided to call of the indefinite strike. The Secretary, Ministry of HRD has patiently heard the demands and expressed that Ministry fully supports for the demands of Employees of NVS and ensured JAC that Govt is taking up the issue with Ministry of Finance and a favourable decision will be evolved as early as possible. Also Commissioner has suggested an action plan on a time bound basis to achieve our objective of materializing both our demands of 1972 pension and 10% Special Allowance to non-teaching staff."

Lets hope something positive would transpire within a reasonable time frame. Else as JAC expressed in its call off letter,"let us also remember that we have not spared our last resort of indefinite strike and our purpose is to get the demands achieved on negotiations".

Pension was assured for Navodaya Employees.

There are rumours under circulation across the navodayas during the last an hour that an agreement was reached in principle between JAC and Govt of India regarding pension. It is said that JAC was assured by Education Secratary regarding Pension. Strike might be called off.

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.

Navodaya Employees got pension!!!!

This was the news, which was covered on almost all the news papers, a day after the cabinet meeting decided to introduce New Pension Plan to Navodaya employees. Staff of Navodayas, spread across the country, were jubilant. But as the real facts emerged gradually, the jubilation gave way for despondence! What cabinet has done is just equalling the services of the staff who have put years of hardwork with that of new employees who have joined after 2004. Policy makers and politicians do know that the teachers of these greatly accliamed schools have no big numbers to shake their vote banks. So make them guinny pigs and experiment as you wish!