14.5 C
New York
HomeBusinessGovt Approves Hike in Employer's Contribution to NPS for CAB Employees

Govt Approves Hike in Employer’s Contribution to NPS for CAB Employees

In a bonanza to Central Autonomous Bodies’ (CAB) employees, the Ministry of Finance has approved the increment of employer’s contribution to the National Pension Scheme (NPS) to 14 per cent. The decision comes over two years after the contribution rates were increased for the central government employees in a notification dated January 31, 2019. However, since CAB employees are not directly central government’s, 14 per cent ruling was not applied to their NPS accounts back then, reported goodreturns.in.

Now since CABs are dependent on the central government for financial aid any decision with budgetary implication has to be taken after prior permission from the centre. However, in the case of some CABs, it was noticed that the employer contribution to NPA and dearness allowance was increased without prior approval from the centre.

The government was informed about such cases where the suo-moto increment was in violation of the Delegation of Financial Powers of CABs. The Department of Expenditure of the Ministry of Finance examined the cases and decided that decision of the notification issued on January 31, 2019, would be extended to the CABs’ employees.

Issuing a memorandum on August 26, 2021, the department informed that the date of effect of the decision for CABs will be the same as for the central government employees i.e. April 1, 2019. The administrative ministries/ departments have been directed to ensure the implementation of the increased rates among the autonomous bodies. The financial implications of the decision will be borne by the government in the same manner as it bore the cost of implementation of the recommendation of the 7th pay commission in the case of autonomous bodies

Recently, the family pension of public sector banks (PBS) employees was also increased by the government. The family pension in the case of PBS was raised to 30 per cent of the last drawn salary of the employees.

While earlier there was a cap of a maximum pension of Rs 9,284 per month in family pension, the capping was removed in the latest decision.

The decision was taken after a series of negotiations between the government and the Indian Banks’ Association. The decision is immediately going to bring relief for thousands of families availing of the benefits of the family pension scheme.

Read all the Latest News, Breaking News and Coronavirus News here

Stay Connected
Must Read
You might also like


Please enter your comment!
Please enter your name here