Pension is the crucial thing in any government employee’s life. It basically provisioned the financial security for them after retirement. Recently, some crucial modifications have been done in the pension rules by the government, which is going to affect all government employees. Let’s check out all the new rules in detail. Until now, the retirement age of government employees was 60 years, now in some departments, this age limit is proposed to be raised to 62 years. In particular, this limit can be raised to 65 years for the experts working in the field of medical and research. This policy aims at providing a long time tenure to employees.
New Way Of Pension Calculation
Newly pension accrual rules prescribed changing method of calculating pensions. It will not depend on the last drawn salary, but will depend on the average drawal of salary during the past service period. This change will ensure equality in pension distribution and provide fair pensions for low-paid employees.
New Pension Scheme (NPS)
New features of the New Pension Scheme (NPS) may expect all government employees appointed on or after 1 January 2004 to go under this scheme. Both individual’s contribution and the government make the contribution towards this scheme. It is an investment-based scheme; the amount of pension, hence, depends on the performance of the investment, so chances of better returns for the employee are made.
Financial Safety And Benefits
The employees, under the recent norms, would be availing of many additional benefits such as dearness allowance, medical facilities, and other social security benefits. The employees under NPS are entitled to a part of the pension as a lump sum at any point in time. Different categories of employees will be affected differently by the new rules. NPS is compulsory for employees under the Central Government, whereas some state governments may carry on with the old pension scheme. Employees will have extra investment options under NPS for public sector undertakings.
Advice Tips For Employees
Government employees are required to understand the details of their pension scheme very well. Under the new rules, they will be having an active role in planning their finances. They can plan better for their retirement by taking advice from experts.
Future Prospects
These new pension rules may evolve further in the future. From time to time, the government could amend it. The employees shall be made aware of the changes and keep on updating their financial planning accordingly.
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