The Central Government had introduced the New Pension System (NPS) with effect from January 1, 2004 (except for armed forces) for its employees.
In respect of Central Government employees who have joined in Government Service on or after 1.1.2004, this scheme is mandatory.
Pension Fund Regulatory and Development Authority (PFRDA), is the interim regulatory body for NPS which was established by Government of India on 23rd August 2003.
In NPS, a government employee who is covered under NPS contributes 10% of his/her salary towards pension along with matching contribution from the employer.
While contributions in NPS are collected from Central Government Employees since 1.1.2004, the pension contributions of Central Government employees have been handed over to Pension fund Managers viz, LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited in a predefined proportion, only from 1st April 2008.
Now, the Minister of State for Finance, Shri Namo Narain Meena in written reply to an Un-starred Question in Lok Sabha on 16.12.2011, stated that the institutional architecture for NPS could not be operationalised by the Interim Pension Fund Regulatory and Development Authority (PFRDA), for the period from 1.1.2004 to 31.03.2008 and therefore, the contribution for the Government employees under the NPS during this period could not be invested in the market.
A total amount of Rs. 971.48 crore, collected towards contribution for Government employees, from 2004 to March 2008, under the New Pension System (NPS), was credited to the Public Account of India. The funds credited to Public Account will carry an interest @ 8% p.a.
PFRDA Bill, 2011 which would give official status to PFRDA has already been approved by Cabinet and placed before Parliament. However, the same is yet to be passed in the parliament for enactment.
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