The government will maintain employee and government contributions in the pension scheme, while ensuring employees receive pension equivalent to 40-45 per cent of their last salary drawn
The central government is planning to implement some changes in the pension system for its employees. Currently, employees contribute 10 percent of their salary to a pension scheme and the government contributes 14 percent and this contribution gets invested in governmental debt. The eventual pension payout depends on the returns from these investments which purely depends on market conditions.
While the government introduced a new pension policy, some states returned to the old pension system, which guarantees a fixed pension of 50 per cent of the employee’s last drawn salary without any contribution required from the employee. The older system, however, puts a strain on the government’s finances. These states include Chhattisgarh, Himachal Pradesh, Rajasthan, Jharkhand and Punjab.
Source: HR Katha
