PM Modi's big plans for central government employees under NPS, may offer 50%…

According to recent reports, things are looking up for central government employees. According to the Financial Express, the newly formed BJP-led NDA government intends to significantly improve pension benefits for central government employees covered by the National Pension System (NPS). The proposed changes aim to provide a pension of up to 50% of the last basic pay, which represents a departure from the current market-based returns system. Approximately 8.7 million central and state government employees who have been enrolled in the NPS since 2004 may benefit from these changes if they are implemented.

Prime Minister Narendra Modi's previous NDA government formed a committee in March 2023, headed by Finance Secretary TV Somanathan. The committee's main objective was to investigate ways to improve pension benefits inside the NPS framework without going back to the Old Pension System (OPS), which is non-contributory.

In May, after lengthy discussions, the committee presented its recommendations. The Andhra Pradesh NPS model, which was introduced in 2023, serves as the model for the proposed scheme. It lays out a clause that guarantees a pension in the range of 40 to 50 percent of the last salary, adjusted for years of service and any pension corpus withdrawals. Furthermore, the budget of the central government would cover any deficits in the pension corpus required to meet the guaranteed pension amount.