Pensions in India - Revision history

2003:DB:5F48:9815:29E3:CC97:B1CE:3BC9: /* Mandatory state provident fund and pension provision */

2021-09-29T21:17:30Z

Mandatory state provident fund and pension provision

← Older revision		Revision as of 02:47, 30 September 2021
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	{{Use Indian English\|date=February 2019}}		{{Use Indian English\|date=February 2019}}

	India operates a complex pension system. There are however three major pillars to the '''Indian pension system''': the solidarity social assistance called the [[National Social Assistance Scheme\|National Social Assistance Programme (NSAP)]] for the elderly poor, the [[National Pension System \|civil servants pension]] and the mandatory defined contribution pension programs run by the [[Employees' Provident Fund Organisation of India]] for private sector employees and employees of state owned companies, and several voluntary plans.<ref>[http://www.globalaging.org/pension/world/social/india.pdf India Social Pension] {{webarchive\|url=https://web.archive.org/web/20120501063159/http://www.globalaging.org/pension/world/social/india.pdf \|date=2012-05-01 }}. GlobalAging.org. Accessed April 29, 2012.</ref>		India operates a complex pension system. There are however three major pillars to the '''Indian pension system''': the solidarity social assistance called the [[National Social Assistance Scheme\|National Social Assistance Programme (NSAP)]] for the elderly poor, the [[National Pension System \|civil servants pension]] (now open for all) and the mandatory defined contribution pension programs run by the [[Employees' Provident Fund Organisation of India]] for private sector employees and employees of state owned companies, and several voluntary plans.<ref>[http://www.globalaging.org/pension/world/social/india.pdf India Social Pension] {{webarchive\|url=https://web.archive.org/web/20120501063159/http://www.globalaging.org/pension/world/social/india.pdf \|date=2012-05-01 }}. GlobalAging.org. Accessed April 29, 2012.</ref>

	==Non-contributory minimum pension==		==Non-contributory minimum pension==
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	The National Social Assistance Scheme is a limited social safety net for the elderly poor and disabled who falls under the official poverty line. It is a non-contributory [[pension]] introduced in 1995. It is targeted at people between 60 and 65 years old who have not been in paid work either for health reasons or because they were carers. To be eligible, one must be above the age of 60 and [[Below Poverty Line (India)\|below the poverty line]].<ref>https://nsap.nic.in/</ref> It is funded through the general taxation.		The National Social Assistance Scheme is a limited social safety net for the elderly poor and disabled who falls under the official poverty line. It is a non-contributory [[pension]] introduced in 1995. It is targeted at people between 60 and 65 years old who have not been in paid work either for health reasons or because they were carers. To be eligible, one must be above the age of 60 and [[Below Poverty Line (India)\|below the poverty line]].<ref>https://nsap.nic.in/</ref> It is funded through the general taxation.

	==~~Civil Servants~~ Pension System==		==National Pension System==
	{{main\|National Pension System}}		{{main\|National Pension System}}

	Civil Servants who joined service before 2004 are entitled to the Civil Service Pension Scheme and the General Provident Fund. These were established in 1972 and 1981 respectively. It was a defined benefit system that the employees did not contribute to and the pension was funded through the general state budget. To qualify for a pension, one must have been in service for at least ten years and the pensionable age was 58. The retired employee received 50% of his/her last salary as the monthly pension. Due to the severe financial burden that this system was placing on government finances that it was abolished for new civil service employees from the year 2004 and replaced by the [[National Pension System]]. <ref>https://timesofindia.indiatimes.com/business/india-business/govt-to-scrap-pension-scheme-for-new-staff/articleshow/235447.cms</ref> The [[National Pension System\|National Pension System (NPS)]] is a defined contribution pension system administered and regulated by the [[Pension Fund Regulatory and Development Authority]] (PFRDA), created by an Act of the Parliament of India. The NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. The employee contributes 10% of his gross salary to the system while the employer contributes a matching amount. At the official age of retirement, the employee can withdraw 60% of the amount as a lump sum while 40% needs to be compulsorily used to buy [[annuity]] that will be used to pay a monthly pension. The system tries to achieve a target of 50% of the last salary of the employee. In the General Provident Fund Scheme, the employee needs to contribute at least 6% of his gross salary and there is a guaranteed return of 8%. The employee can withdraw the lump sum amount when he/she retires.<ref>https://www.policybazaar.com/life-insurance/pension-plans/articles/how-general-provident-funds-works/</ref>		Civil Servants who joined service before 2004 are entitled to the Civil Service Pension Scheme and the General Provident Fund. These were established in 1972 and 1981 respectively. It was a defined benefit system that the employees did not contribute to and the pension was funded through the general state budget. To qualify for a pension, one must have been in service for at least ten years and the pensionable age was 58. The retired employee received 50% of his/her last salary as the monthly pension. Due to the severe financial burden that this system was placing on government finances that it was abolished for new civil service employees from the year 2004 and replaced by the [[National Pension System]]. <ref>https://timesofindia.indiatimes.com/business/india-business/govt-to-scrap-pension-scheme-for-new-staff/articleshow/235447.cms</ref> The [[National Pension System\|National Pension System (NPS)]] is a defined contribution pension system administered and regulated by the [[Pension Fund Regulatory and Development Authority]] (PFRDA), created by an Act of the Parliament of India. The NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. The employee contributes 10% of his gross salary to the system while the employer contributes a matching amount. At the official age of retirement, the employee can withdraw 60% of the amount as a lump sum while 40% needs to be compulsorily used to buy [[annuity]] that will be used to pay a monthly pension. The system tries to achieve a target of 50% of the last salary of the employee. This system has been made compulsory for all civil servants but voluntary for others. In the General Provident Fund Scheme, the employee needs to contribute at least 6% of his gross salary and there is a guaranteed return of 8%. The employee can withdraw the lump sum amount when he/she retires.<ref>https://www.policybazaar.com/life-insurance/pension-plans/articles/how-general-provident-funds-works/</ref>

	==Mandatory state pension provision==		==Mandatory state provident fund and pension provision==
	{{main\|Employees' Provident Fund Organisation}}		{{main\|Employees' Provident Fund Organisation}}
	This mandatory scheme is part of the [[Social Security in India\|Social Security system in India]] that covers all employees of the private sector and employees of state owned companies. It is run by the social security body Employees' Provident Fund Organisation (EPFO). In this system, an employee contributes 10% to 12% of his monthly salary here and his employer contributes a matching amount, with a total contribution of 20% to 24% of the employee's gross salary, while the state contributes an additional 1.16%, which makes it a total of 25.16% of the employee's gross salary. The contributions go towards the mandatory provident fund, the mandatory pension scheme and a mandatory disability and life insurance scheme. The employee withdraws the lump-sum amount deposited for the provident fund along with the interest accumulated once the employee reaches the statutory retirement age. In case of death or permanent disability during work, the dependent gets a monthly pension throughout their life.<ref>https://www.epfindia.gov.in/site_en/For_Employees.php</ref> Most retired employees buys lifetime annuity or pension plan with the lump-sum amount from state-owned banks or insurance companies which provides them with a monthly pension amount that's close to 50% of their last salary for a lifetime. <ref>https://www.financialexpress.com/money/retirement-planning-how-much-money-do-you-need-to-retire-comfortably-in-india/1892963/</ref>		This mandatory scheme is part of the [[Social Security in India\|Social Security system in India]] that covers all employees of the private sector and employees of state owned companies. It is run by the social security body Employees' Provident Fund Organisation (EPFO). In this system, an employee contributes 10% to 12% of his monthly salary here and his employer contributes a matching amount, with a total contribution of 20% to 24% of the employee's gross salary, while the state contributes an additional 1.16%, which makes it a total of 25.16% of the employee's gross salary. The contributions go towards the mandatory provident fund, the mandatory pension scheme and a mandatory disability and life insurance scheme. The employee withdraws the lump-sum amount deposited for the provident fund along with the interest accumulated once the employee reaches the statutory retirement age. In case of death or permanent disability during work, the dependent gets a monthly pension throughout their life.<ref>https://www.epfindia.gov.in/site_en/For_Employees.php</ref> Most retired employees buys lifetime annuity or pension plan with the lump-sum amount from state-owned banks or insurance companies which provides them with a monthly pension amount that's close to 50% of their last salary for a lifetime. <ref>https://www.financialexpress.com/money/retirement-planning-how-much-money-do-you-need-to-retire-comfortably-in-india/1892963/</ref>

81.250.246.39: /* Mandatory state pension provision */

2021-05-22T18:09:04Z

Mandatory state pension provision

← Older revision		Revision as of 23:39, 22 May 2021
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	{{use dmy dates\|date=February 2019}}		{{use dmy dates\|date=February 2019}}
	{{Use Indian English\|date=February 2019}}		{{Use Indian English\|date=February 2019}}
	~~'''Pensions in India''' include various financial programs to support [[Retirement in India]].~~

	There are three major ~~components~~ to the '''Indian pension system''': the [[civil servants pension]], the mandatory		India operates a complex pension system. There are however three major pillars to the '''Indian pension system''': the solidarity social assistance called the [[National Social Assistance Scheme\|National Social Assistance Programme (NSAP)]] for the elderly poor, the [[National Pension System \|civil servants pension]] and the mandatory defined contribution pension programs run by the [[Employees' Provident Fund Organisation of India]] for private sector employees and employees of state owned companies, and several voluntary plans.<ref>[http://www.globalaging.org/pension/world/social/india.pdf India Social Pension] {{webarchive\|url=https://web.archive.org/web/20120501063159/http://www.globalaging.org/pension/world/social/india.pdf \|date=2012-05-01 }}. GlobalAging.org. Accessed April 29, 2012.</ref>
	pension programs run by the [[Employees' Provident Fund Organisation of India]], and ~~the unorganised sector pension called the [[National Social Assistance Scheme\|National Social Assistance Programme (NSAP)]]~~.<ref>[http://www.globalaging.org/pension/world/social/india.pdf India Social Pension] {{webarchive\|url=https://web.archive.org/web/20120501063159/http://www.globalaging.org/pension/world/social/india.pdf \|date=2012-05-01 }}. GlobalAging.org. Accessed April 29, 2012.</ref>

	~~The State of [[Uttar Pradesh]] has implemented E-pension system which allows filling up of pension forms, checking, verification and payment using an online system.<ref>{{cite web\|title~~=~~Akhilesh Yadav approves E-pension scheme in Uttar Pradesh\|url~~=~~http://news.biharprabha.com/2014/07/akhilesh-yadav-approves-e~~-pension~~-scheme-in-uttar-pradesh/\|work~~=~~IANS\|publisher~~=~~news.biharprabha.com~~\|~~access-date=3 July 2014~~}}~~</ref>~~		==Non-contributory minimum pension==
			{{main\|National Social Assistance Scheme}}

	The ~~[[National Pension System\|~~National ~~Pension System (NPS)]]~~ is a ~~voluntary defined contribution pension system administered~~ and ~~regulated by~~ the [[~~Pension Fund Regulatory and Development Authority~~]] ~~(PFRDA), created by an Act of the Parliament of India~~. ~~The NPS started with the decision of the Government of India to stop defined benefit pensions~~ for ~~all its employees who joined after 1 January 2004~~. ~~While~~ the ~~scheme was initially designed for government employees only, it was opened up for all citizens~~ of India ~~in 2009. NPS is an attempt by~~ the ~~government to create a pensioned society in India~~.<ref>~~[http~~://~~www.pfrda~~.~~org~~.in/~~index1.cshtml?lsid=66]~~</ref>		The National Social Assistance Scheme is a limited social safety net for the elderly poor and disabled who falls under the official poverty line. It is a non-contributory [[pension]] introduced in 1995. It is targeted at people between 60 and 65 years old who have not been in paid work either for health reasons or because they were carers. To be eligible, one must be above the age of 60 and [[Below Poverty Line (India)\|below the poverty line]].<ref>https://nsap.nic.in/</ref> It is funded through the general taxation.

	==Government ~~schemes~~==		==Civil Servants Pension System==
	Government of India launched [[Pradhan Mantri Shram Yogi Maan-Dhan]] (PMSYM) in February 2019 to provide an assured pension of {{INRConvert\|3\|k}} per month to unorganised workers.<ref>{{citation \|title=Good News! Unorganised workers can now subscribe to this pension scheme \|url=https://www.shaleshyadav.com/2020/07/sspy-sspy-pension-list-2020-sarkari.html?m=1\|work=[[government pension yojna}}</ref>		{{main\|National Pension System}}

			Civil Servants who joined service before 2004 are entitled to the Civil Service Pension Scheme and the General Provident Fund. These were established in 1972 and 1981 respectively. It was a defined benefit system that the employees did not contribute to and the pension was funded through the general state budget. To qualify for a pension, one must have been in service for at least ten years and the pensionable age was 58. The retired employee received 50% of his/her last salary as the monthly pension. Due to the severe financial burden that this system was placing on government finances that it was abolished for new civil service employees from the year 2004 and replaced by the [[National Pension System]]. <ref>https://timesofindia.indiatimes.com/business/india-business/govt-to-scrap-pension-scheme-for-new-staff/articleshow/235447.cms</ref> The [[National Pension System\|National Pension System (NPS)]] is a defined contribution pension system administered and regulated by the [[Pension Fund Regulatory and Development Authority]] (PFRDA), created by an Act of the Parliament of India. The NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. The employee contributes 10% of his gross salary to the system while the employer contributes a matching amount. At the official age of retirement, the employee can withdraw 60% of the amount as a lump sum while 40% needs to be compulsorily used to buy [[annuity]] that will be used to pay a monthly pension. The system tries to achieve a target of 50% of the last salary of the employee. In the General Provident Fund Scheme, the employee needs to contribute at least 6% of his gross salary and there is a guaranteed return of 8%. The employee can withdraw the lump sum amount when he/she retires.<ref>https://www.policybazaar.com/life-insurance/pension-plans/articles/how-general-provident-funds-works/</ref>

			==Mandatory state pension provision==
			{{main\|Employees' Provident Fund Organisation}}
			This mandatory scheme is part of the [[Social Security in India\|Social Security system in India]] that covers all employees of the private sector and employees of state owned companies. It is run by the social security body Employees' Provident Fund Organisation (EPFO). In this system, an employee contributes 10% to 12% of his monthly salary here and his employer contributes a matching amount, with a total contribution of 20% to 24% of the employee's gross salary, while the state contributes an additional 1.16%, which makes it a total of 25.16% of the employee's gross salary. The contributions go towards the mandatory provident fund, the mandatory pension scheme and a mandatory disability and life insurance scheme. The employee withdraws the lump-sum amount deposited for the provident fund along with the interest accumulated once the employee reaches the statutory retirement age. In case of death or permanent disability during work, the dependent gets a monthly pension throughout their life.<ref>https://www.epfindia.gov.in/site_en/For_Employees.php</ref> Most retired employees buys lifetime annuity or pension plan with the lump-sum amount from state-owned banks or insurance companies which provides them with a monthly pension amount that's close to 50% of their last salary for a lifetime. <ref>https://www.financialexpress.com/money/retirement-planning-how-much-money-do-you-need-to-retire-comfortably-in-india/1892963/</ref>

			==Voluntary Schemes==
			Government of India launched [[Pradhan Mantri Shram Yogi Maan-Dhan]] (PMSYM) in February 2019 to provide an assured pension of {{INRConvert\|3\|k}} per month to unorganised workers.<ref>{{citation \|title=Good News! Unorganised workers can now subscribe to this pension scheme \|url=https://www.shaleshyadav.com/2020/07/sspy-sspy-pension-list-2020-sarkari.html?m=1\|work=[[government pension yojna}}</ref> Several private companies additionally provides private pension plans for their employees which are voluntary.

			== See also ==
			* [[Social Security in India]]
			* [[Pension]]
			* [[Indian labor law]]

	==References==		==References==
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	{{DEFAULTSORT:Indian Pension System}}		{{DEFAULTSORT:Indian Pension System}}
	[[Category:Pensions in India\| ]]		[[Category:Pensions in India\| ]]
	[[Category:~~Indian labour law~~]]		[[Category:Social security in India]]


	{{India-gov-stub}}		{{India-gov-stub}}

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{{use dmy dates|date=February 2019}}
{{Use Indian English|date=February 2019}}
'''Pensions in India''' include various financial programs to support [[Retirement in India]].

There are three major components to the '''Indian pension system''': the [[civil servants pension]], the mandatory
pension programs run by the [[Employees' Provident Fund Organisation of India]], and the unorganised sector pension called the [[National Social Assistance Scheme|National Social Assistance Programme (NSAP)]].<ref>[http://www.globalaging.org/pension/world/social/india.pdf India Social Pension] {{webarchive|url=https://web.archive.org/web/20120501063159/http://www.globalaging.org/pension/world/social/india.pdf |date=2012-05-01 }}. GlobalAging.org. Accessed April 29, 2012.</ref>

The State of [[Uttar Pradesh]] has implemented E-pension system which allows filling up of pension forms, checking, verification and payment using an online system.<ref>{{cite web|title=Akhilesh Yadav approves E-pension scheme in Uttar Pradesh|url=http://news.biharprabha.com/2014/07/akhilesh-yadav-approves-e-pension-scheme-in-uttar-pradesh/|work=IANS|publisher=news.biharprabha.com|access-date=3 July 2014}}</ref>

The [[National Pension System|National Pension System (NPS)]] is a voluntary defined contribution pension system administered and regulated by the [[Pension Fund Regulatory and Development Authority]] (PFRDA), created by an Act of the Parliament of India. The NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. While the scheme was initially designed for government employees only, it was opened up for all citizens of India in 2009. NPS is an attempt by the government to create a pensioned society in India.<ref>[http://www.pfrda.org.in/index1.cshtml?lsid=66]</ref>

==Government schemes==
Government of India launched [[Pradhan Mantri Shram Yogi Maan-Dhan]] (PMSYM) in February 2019 to provide an assured pension of {{INRConvert|3|k}} per month to unorganised workers.<ref>{{citation |title=Good News! Unorganised workers can now subscribe to this pension scheme |url=https://www.shaleshyadav.com/2020/07/sspy-sspy-pension-list-2020-sarkari.html?m=1|work=[[government pension yojna}}</ref>

==References==
[https://www.shaleshyadav.com/2020/07/sspy-sspy-pension-list-2020-sarkari.html?m=1]
<references/>

{{Social issues in India}}
{{Asia topic|Pensions in}}

{{DEFAULTSORT:Indian Pension System}}
[[Category:Pensions in India| ]]
[[Category:Indian labour law]]

{{India-gov-stub}}