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Informist, Tuesday, Jul 23, 2024

--BUDGET: To start NPS Vatsalya plan for minors 

--BUDGET: Parents, guardians to contribute under NPS Vatsalya plan 

--BUDGET: NPS plan for minors can become normal on attaining 18 yrs 

--BUDGET: Propose employees' deduction for NPS to 14% from 10% 

NEW DELHI – Finance Minister Nirmala Sitharaman today announced three measures to boost the National Pension System, including increasing deductions allowed to non-government employers for contributing to the New Pension System from the current 10% of salary to 14%.

"To improve social security benefits, deduction of expenditure by employers towards NPS (National Pension System) is proposed to be increased from 10 to 14% of the employee's salary," Sitharaman said in her speech. 

She also announced a new plan – NPS-Vatsalya – under which parents and guardians can make contributions to the National Pension System for minors. On attaining 18 years of age, the plan can be converted seamlessly into a normal National Pension System account, she said.

In the Budget for 2023-24, the government had set up a committee under the chairmanship of Finance Secretary T.V. Somanathan to review the pension system. "The committee to review the NPS has made considerable progress in its work," Sitharaman said today.

Sitharaman had announced setting up a committee to study whether changes are required in the existing framework of the National Pension System, and suggest ways to improve pension benefits for central government employees while ensuring fiscal prudence. 

The panel was also tasked with holding consultations with states before making its final recommendations. The pension authority's Chairman Deepak Mohanty is also on the panel. "A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens," Sitharaman said today.  End

Reported by Priyasmita Dutta

Edited by Avishek Dutta

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