‘Pension scheme best for staff’

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Thiruvananthapuram: The government has no way other than going in for the contributory pension scheme for its staff, chief minister Oommen Chandy has asserted, and cited the benefits for the state as well as the employees from the new scheme.
In 2001-02, the state required only Rs 1,838 crore to meet the annual pension commitment. Now. it stood at Rs 8,700 crore. This would go up steadily in the next 10 years and even sabotage the present statutory pension scheme, he said.
However, employee would have the option of withdrawing upto 60 percent of the amount, in lump sum, on retirement. The pension would be paid as per the annuity scheme from the remaining funds.
Government employees are threatening an indefinite strike from Tuesday in protest against the new pension scheme. The scheme is to be introduced only for those joining its service after April 1, 2013.
Citing other benefits, Chandy said if someone who opted for the NPS died while in service, the dependents would be provided a sum equivalent to the last drawn salary till one of them gets a job under the ‘dying in harness’ scheme.
The new scheme would give employees the freedom to choose where to invest their money. On the other hand, the statutory pension fund that would continue to be applicable to those who joined service prior to this date offered assured benefits with no freedom to choose.
The government would deposit 10 per cent and the employee another 10 per cent of his or her monthly salary as per the provisions of the new scheme.
A subscriber can invest in government security up to 100 per cent or corporate bonds up to 100 per cent and equity up to 50 per cent. The pension fund regulatory and development authority (PFRDA) would constantly monitor the performance to prevent risky investments.