Take home Rs 77,000 annual pension under NPS / Dec 24, 2006 / Financial Express

From Indiapensions

'Take home Rs 77,000 annual pension under NPS'

MAHUA VENKATESH

NEW DELHI, DEC 23: A subscriber investing Rs 1,000 per month for 35 years under the proposed new pension scheme would get a lifetime pension of Rs 47,000 to Rs 77,000 annually, depending on the models on offer.

This has been highlighted in the policy brief of the Parliamentary Research Service of the Centre for Policy Research. The calculations, according to the study, are based on the current market rates for annuity.

Official sources said that this means that even if the subscriber chooses to put in his/her pension fund in the safe and low risk options, the returns would be a minimum of Rs 47,000 annually. "This is a handsome return and should put to rest all speculations about the credibility of the new pension system," the source said.

Now with talks failing between the Centre and the Left parties on the new pension system, there is pressure on the finance ministry to resolve the core issue, which targets not just Central government employees but also those working in the unorganised sector. Currently, there is no pension scheme for the unorganised sector.

"The new pension scheme is about providing social security to the unorganised sector. However, now it seems it is only about the Central government employees," the source added.

It is understood that Prime Minister Manmohan Singh has also held a meeting with the leaders of the Left parties to sort out the contentious issue.

At present, with 15 states already adopting the new pension scheme, there are about two lakh employees under the new pension scheme.

Meanwhile, PFRDA has already said that the new scheme would have an investment option for subscribers to put in their entire fund into gilts apart from having the other three options - safe, balanced and growth.

However the regulator is yet to take a final call on the number of pension fund managers. It would also put up the final draft regulations once the Bill is passed.