Kya sachmuch aisa hoga ?? GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’ – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension At the time of retirement, the employee is likely to get Rs. 2,87,26,201, A very popular website among Central Government employees, GConnect, which began functioning more than 8 years ago, continues to be a strong line of communication between the Central Government and its employees. The article that was published yesterday seeks to answer critics who claim that the new pension scheme is outright bad. GConnect has made it very clear that the opinions expressed in the article belong to its writer, Mr. Dorai, Deputy Director, ESIC Model Hospital and that the website doesn’t necessarily subscribe to them. The ‘study report,’ that compares the salient features of the old(Central Government Pension Scheme) and new pension schemes, is bound to create controversies. While various Central Govt employees associations and federations are putting pressure on the Government to withdraw the new pension scheme and enforce the previous one, we believe that this article is going to make a huge impact. The writer begins the article by stating that those who are opposing the new pension scheme, with more benefits than the old pension scheme, are doing so due to their ignorance. The article also explains how the new pension scheme could create huge wealth. The report gives as an example, the case of an employee who joins the Central Government employment as a Upper Division Clerk(UDC) in 2014 and retires after 35 years service, in 2049. The report gives a comparative study of how the pension fund grow each of these 35 years. The study also assumes a regular dearness allowance of 6% every six months, and an annual increment of 3%. The study also assumes that, at an interval of 10 years, the employee gets 3 promotions during his service tenure. Most importantly, it is assumed that matching the employee’s contribution, the Government’s contribution too would witness an 8.7% increase per annum. At the time of retirement, the employee is likely to get Rs. 2,87,26,201, which is split into two shares – 40% and 60%, which amounts to Rs. 1,14,90,481, and Rs. 1,72,35,720, respectively. 60% of the lumpsum pension wealth is given at the time of retirement. The remaining 40% is invested in an annuity scheme. It is stated that the monthly pension will be a minimum Rs. 83,306. In addition to this, at the age of 70, the employee gets the remaining 40% back. The article strongly claims that this money could be the gift that the person leaves behind for his future generation. The article’s highlight feature is the claim that if the Pay Commission recommendations are taken into account, the amount could be much higher and that the UDC could get as much as Rs. 5 crores at the time of retirement. According to the old Govt pension scheme, the employee’s monthly pension amount would be Rs. 1,00,934, and after his demise, his spouse would get Rs. 10,317 plus Dearness Allowance. After his/her death, there are no more benefits for the family. The article is indirectly stating that the absence of gratuity and other such benefits is not a huge issue. According to the old Govt pension scheme, at the time of retirement, the employee would make only Rs. 38,32,550, which is Gratuity (16.5 months) + EL Encashment + Commutation. While discussing the General Provident Fund (GPF), the article assumes that since nobody leaves anything much in this fund, its overall impact on the total pension fund would be minimal. The writer concludes his article by declaring that those who oppose the new pension scheme lack intelligence. source-7thpaycommissionnews.in/gconnect-has-published-an-article-titled-nps-is-far-beneficial-than-government-pension/ Benefits under NPS Let me take a case of Upper Division Clerk(UDC) who joins government service in 2014 at the age of 25 and renders 35 years of service till attaining 60 years of age. He / She gets 3% annual increment every year and gets one promotion every 10 year under M.A.C.P. Although he / she is likely to get 14 to 20% increase in D.A every year as per Consumer Price Index I just take 12%(assuming 6 + 6%) 2 times D.A in a year YEAR D.A. assumed @ 12% Per annum PAY + GRADE PAY with 3% annual increment D.A TOTAL Total Monthly Subscription (employee and Govt) Annual Subscription AnnualAppreciationof Investments @ 8.7% TOTAL PENSION WEALTH 2014 107% 9910 10604 20514 4102 49224 2320 51,544 2015 119% 10210 12150 22360 4471 53652 7012 1,12,208 2016 131% 10520 13781 24301 4860 58320 12511 183039 2017 143% 10840 15501 26341 5268 63216 18903 265158 2018 155% 11170 17314 28484 5696 68352 26290 359800 2019 167% 11510 19222 30732 6146 73752 34779 468331 2020 179% 11860 21229 33089 6618 79416 44487 592234 2021 191% 12220 23340 35560 7112 85344 55546 733124 2022 203% 12590 25558 38148 7630 91560 68097 892781 2023 215% 12970 27886 40856 8172 98064 82293 1073138 2024* 227% 14130 32075 46205 9240 110880 98589 1282607 2025 239% 14560 34798 49358 9872 118464 117170 1518241 2026 251% 15000 37650 52650 10530 126360 138041 1782642 2027 263% 15450 40634 56084 11216 134592 161433 2078667 2028 275% 15920 43780 59700 11940 143280 187596 2409543 2029 287% 16400 47068 63468 12694 152328 216809 2778680 2030 299% 16900 50531 67431 13486 161832 249371 3189883 2031 311% 17410 54145 71555 14312 171744 285614 3647241 2032 323% 17940 57946 75886 15178 182136 325893 4155270 2033 335% 18480 61908 80388 16078 192936 370601 4718807 2034* 347% 21060 73078 94138 18828 225936 421184 5365927 2035 359% 21700 77903 99603 19920 239040 478101 6083068 2036 371% 22360 82956 105316 21064 252768 541139 6876975 2037 383% 23030 88205 111235 22248 266976 610878 7754829 2038 395% 23730 93734 117464 23492 281904 687954 8724687 2039 407% 24450 99512 123962 24792 297504 773068 9795259 2040 419% 25190 105546 130736 26148 313776 866975 10976010 2041 431% 25950 111845 137795 27560 330720 970498 12277228 2042 443% 26730 118414 145144 29028 348336 1084535 13710099 2043 455% 27540 125307 152847 30570 366840 1210066 15287005 2044* 467% 29640 138419 168059 33612 403344 1348977 17039326 2045 479% 30530 146239 176769 35354 424248 1501283 18940857 2046 491% 31450 154420 185870 37174 446088 1668876 21055821 2047 503% 32400 162972 195372 39074 468888 1853953 23378662 2048 515% 33380 171907 205287 41058 492696 2057162 25928520 2049 527% 34390 181235 215625 43126 517512 2280169 28726201
Posted on: Mon, 17 Nov 2014 15:06:06 +0000