There are about 23 lakh central government employees in the country, and if we include state employees, then this figure comes to about 90 lakh. Now the central government has introduced a new pension scheme for government employees, which is called Unified Pension Scheme (UPS). Under UPS, the government has guaranteed pension to the employees, and this is quite different from NPS. Because NPS is based on market risk.
In fact, under the new pension scheme, after working for 25 years in UPS, 50 percent of the basic salary will be given as pension. The pension amount will be 50 percent of the average basic salary of the last 12 months. Apart from this, there is also a provision of minimum assured pension in UPS, under which a pension of at least Rs 10,000 per month will be assured after 10 years of service. In the family pension category in UPS, on the death of the employee, 60 percent of the pension will be given to his family. Along with all these pensions, the benefit of dearness relief i.e. DR is also available.
But now the question arises that there are about 4.5 crore to 5 crore private employees in the country, what are the government plans for them, are the people doing private jobs not worried about old age, everyone wants a source of secure income in old age, and then when about 5 crore people in the country are associated with the private sector, then shouldn’t there be a guaranteed pension scheme for them, let us know what are the pension schemes for private employees at present and is there a pension guarantee in them?
1. EPS
Pension facility is available under EPFO for those doing private jobs. PF account holders are given the benefit of pension under EPS-95. According to the rules of EPFO, any employee becomes eligible to get pension after working for 10 years. This scheme guarantees pension benefits to eligible employees who reach the age of 58 years.
Calculation of PF deduction
Actually, a large part of the salary of people working in the private sector is deducted as PF, which is deposited in the employee’s PF account every month. If you work in a private job for 10 years, you become eligible for pension. According to the rules, 12 percent of the employee’s basic salary + DA is deposited in the PF account every month. Out of which the employee’s entire share goes to EPF, while 8.33% of the employer’s share goes to the Employee Pension Scheme (EPS) and 3.67% goes to EPF contribution every month. But at present this amount is very less.
There are so many types of pension under EPS
The EPS-95 pension scheme offers various types of pensions to provide support to the family members of the pensioner, including widow pension, child pension and pension for orphans. After the death of an employee, if the widowed spouse remarries, the pension benefits start going to the children.
2. NPS
National Pension System (NPS) is an option for private employees, this scheme was earlier only for government employees. NPS is a long term investment plan. This scheme has been started keeping in mind that there should be regular income even after retirement. This is a contributory pension scheme run by the government. After depositing money in NPS, a large fund (Retirement fund) is received in lump sum on retirement. Along with this, monthly pension is received based on your annuity amount and its performance.
The National Pension Scheme (NPS) was started in January 2004. Earlier, only government employees could invest in this scheme. But in the year 2009, it was opened for people of all categories. That is, everyone can take advantage of this scheme. In this scheme, lump sum cash and monthly pension facility is available after completing 60 years of age. Any Indian citizen whose age is between 18 to 70 years can invest in NPS.
Benefits of investing in NPS
NPS account provides the facility of monthly or annual investment. You can start investing in NPS from Rs 1,000 per month. Which you can continue till the age of 70 years. It is necessary to buy 40 percent annuity on NPS investment. While 60 percent of the amount can be withdrawn in lump sum after 60 years. By investing in NPS, you can get the benefit of additional tax exemption of up to Rs 50,000 annually. You can open an NPS account in any bank. After maturity, investors can withdraw 60 percent of the money from NPS. That is, after the age of 60, a person can withdraw 60 percent of the total deposit amount in NPS without any tax.
For example, if you are 30 years old and you invest Rs 5,000 every month in an NPS account, and continue investing for 30 years. That is, till the age of 60. If you get a return of 10% on that investment, then at the age of 60, a total of Rs 1.12 crore will be deposited in your NPS account. According to the rules, as soon as you turn 60, you will get a lump sum of Rs 45 lakh in cash. Apart from this, you will get a pension of Rs 45,000 every month. While the investor will invest a total of Rs 18 lakh in 30 years. In this, an annual return of 10 percent has been estimated, interest rates can fluctuate.
How much investment is required to get a monthly pension of Rs 50,000?
Suppose your age is 35 years now, then you have to invest for the next 25 years i.e. till the age of 60. In this situation, if you invest Rs 15,000 every month in NPS, then after 25 years from today you will get a pension of more than 50 thousand every month. According to the NPS Trust Calculator, by investing 15 thousand every month, you will invest a total of Rs 45 lakh in the next 25 years. If we assume an average return of 10 percent, then the total amount after maturity will be Rs 2 crore. After maturity, if you take 50 percent annuity and assume the annuity rate to be six percent, then according to this, the monthly pension comes to Rs 50,171.
3. Atal Pension Yojana
Pension is a big support in old age. Keeping this in mind, the Modi government started the Atal Pension Yojana in May 2015. This is a government pension scheme and it gives guaranteed returns. You can get pension ranging from Rs 1000 to Rs 5000 every month depending on your investment. By joining the Atal Pension Yojana, both husband and wife can get pension up to Rs 10,000 per month.
Any citizen of India can take advantage of this scheme. If your age is less than 40 years, then quickly open an account in Atal Pension Yojana. Because people above 40 years of age cannot join this scheme. To get pension under this scheme, you have to invest for at least 20 years. Then as soon as you turn 60, you will start getting pension every month. If you are 18 years old, then you can invest Rs 210 every month i.e. Rs 7 daily in this scheme and get a pension of Rs 5000 per month. On the other hand, if you want only Rs 1000 per month pension after the age of 60, then for this you will have to deposit only Rs 42 every month from the age of 18.
If investors want to withdraw their money before the age of 60, then this is possible under certain circumstances. On the other hand, if the husband dies before the age of 60, then the wife will get the pension facility. On the death of both husband and wife, the nominee will get the entire money back.
Apart from this, apart from post office and LIC, many private insurance companies also offer pension plans, some private employees buy such schemes for retirement. But the way the government has come up with OPS first and now UPS, in which pension is guaranteed, there is no such scheme for private employees at present. Employees contribute very little in EPFO’s EPS scheme, due to which the pension amount is very less.
Source (PTI) (NDTV) (HINDUSTANTIMES)