New Pension Scheme
2
Flaws in new pension scheme Centre government has introduced new pension scheme for govt. Employees who will be recruited 2004 onwards. Time will tell whether it will be beneficial for employees or not or government is shedding its responsibility from providing social security to its employees. Who at the age of 60 years are not able to do much earning works & has larger circle of social responsibility. Before 2004 for professionals at comparative less salaries govt. Jobs were still lucrative as they offered job security with pension. So employees took difference of salary then higher paid private jobs as their investment to get after retirement as pension. Govt. has done nothing to replace that nature of pension by revision in salary structure for employees. While government employees are highest taxpayer in salaried class. As private companies give salary to their employees in a form which attracts least income tax. This is again additional benefit for persons working in private organizations. Employees recruited after 2004 are working in same pay scales as employees before 2004. While performing same duties they will not have same pension criterion but have same salary structure except a meagre contribution by employer equal to employee’s contribution. Even which (employer’s contribution) was taxable till March 2011 & included in savings of 1 lakh. Now it’s excluded but still
description
New pension scheme
Transcript of New Pension Scheme
Flaws in new pension scheme
Centre government has introduced new pension scheme for govt. Employees who will be recruited 2004 onwards. Time will tell whether it will be beneficial for employees or not or government is shedding its responsibility from providing social security to its employees. Who at the age of 60 years are not able to do much earning works & has larger circle of social responsibility.
Before 2004 for professionals at comparative less salaries govt. Jobs were still lucrative as they offered job security with pension. So employees took difference of salary then higher paid private jobs as their investment to get after retirement as pension. Govt. has done nothing to replace that nature of pension by revision in salary structure for employees.
While government employees are highest taxpayer in salaried class. As private companies give salary to their employees in a form which attracts least income tax. This is again additional benefit for persons working in private organizations.
Employees recruited after 2004 are working in same pay scales as employees before 2004. While performing same duties they will not have same pension criterion but have same salary structure except a meagre contribution by employer equal to employee’s contribution. Even which (employer’s contribution) was taxable till March 2011 & included in savings of 1 lakh. Now it’s excluded but still employee’s contribution is included in 1 lakh savings. Which is further invested by fund managers appointed Point is their colleagues getting same pay, duties are having full 1 lakh limit available on their disposal still have pension & income difference nil.
If an employee retires these days he will get little less than 50% of his last salary as pension. But for employees recruited after 2004 employer’s contribution is 10 % of his on-going basic salary. This by no way is compensation to older pension scheme.
This is one of the reasons why in present situation professional young talent is running away from govt. jobs. Govt. should restructure (increase) salary of employees recruited after 2004 considering that they are not having pension similar to older colleagues but having same salaries. Otherwise already
going on crisis of good talent in govt. jobs may deepen more in coming times as people may get aware.
