Background Information

New Pension Schemehave been made in applicable on Government servants appointed in civil services of the state on or after 1.1.2004. The new pension system is based on defined contributions. The system is mandatory for new recruits to the Central Government service (except the armed forces). Government of Rajasthan introduced NPS for State Government employees/Panchayat Samities/ Zila Parishad/ State autonomous bodies appointed on or after 1.1.2004.

The monthly contribution is 10 percent of the Pay and DA to be paid by the employee and matching contribution by the state Government. The contributions and returns thereon would be deposited in a non-withdrawable pension account. The SIPF Deparment is maintaining the scheme as interim arrangement till transfer of data to PFRDA.

Individuals can normally exit at or after age 60 years from the pension system. At exit, the individual would be required to invest at least 40 percent of pension wealth to purchase an annuity. In case of Government employees, the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual would receive a lump-sum of the remaining pension wealth, which the subscriber would be free to utilize in any manner. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitisation would be 80% of the pension wealth.

State Insurance & Provident Department (GoRj) is the State Nodal Agency for execution of New Pension Scheme in Rajasthan. The Department has been maintaining records for the above scheme.

After notification by Government of Rajasthan on 27.12.2010 regarding adoption of NPS Architecture(PFRDA) in toto, agreements have been signed by Director SIPF with National Securities Depository Ltd.(NSDL as central record keeping agency) and NPS Trust. Unique & Portable Permanent Retirement Account Number (PRAN) will be issued to all Rajasthan Government servants on whom above scheme is applicable. Pension system is envisaged to be based on two types of sub-accounts created for individual subscribers:

  • Tier-I non-withdrawable pension account, and
  • Tier-II withdrawable savings account.

(Note : Currently only Tier-I non-withdrawable pension account has been started by PFRDA.Except for All India Service officers)

NSDL (CRA) will serve for record keeping; reconciliation; netting and funds transfer; interconnectivity and access to PFRDA,pension fund managers (PFMs) to choose from which will offer different categories of schemes.At present choice of PFMs has not been provided.

The participating entities (PFMs, CRA etc.) would give out easily understood information about past performance & regular NAVs, so that the individual would able to make informed choices about which scheme to choose.

Pension Reforms http://www.finmin.nic.in/the_ministry/dept_fin_services/pension/p_index.asp