Dear Friends,

Could you please confirm Can an employer contribute in Two Pension schemes of Government “New Pension Scheme” and “Family Pension Fund of RPFC”. I read somewhere you have to exit from RPFC if you want to join NPS as a corporate member on the behalf of your employees.

Also on PFRDA websites states:

Who is not covered by the NPS?

You are not covered by the NPS if

1. You are already covered by the Employees Provident Fund and Miscellaneous

Provisions Act, 1952 and any other special Acts governing these funds, or

2. You joined Central Government service before 01 January 2004, or

3. You are an employee of the Indian Armed Forces (Army, Navy and Air Force), or

4. You are employed in a Department or in a Post under which you are not eligible to receive a pension from the Consolidated Fund of India.

Link: <link updated to site home>

Request learned members to guide on this :

1. Is it possible to Join both the schemes simultaneously and take tax advantages. (Sec 80C and 80 CCD)?

2. What is procedure to quit FPF and what would happen to balance in the accounts of members with FPF, will it get transferred to NPS Account?

3. Which scheme is better in terms of Risk and Pension and Tax Benefits?

Thanking you in advance for your Time !

Thanks & Regards,

Sukhvinder Singh

From India, Delhi
Dear Sukhvinder
please donot confuse between New pension scheme and family pension Fund/scheme.There is no family
pension scheme /Fund is existence as on today.When new pension scheme implimented in 1995,family pension fund was merged with this amount.
As you have asked tax exemption ,please note whatever amount you are contributing towards PF
&NPS upto 1lakh per year is exempted under 80c.

From India, Delhi
Dear Sir,

Thanks For Reply. My understanding is both are different. The Employee’s Pension Scheme, 1995 is part of Provident Fund where 8.33% of Employer’s contribution (With ceiling of Rs. 6500/- as Wage and Rs. 541/- as Contribution) get deposited into FPF account and balance in Provident Fund. Whereas The NPS was introduced with effect from 01 January 2004. The initial intention of NPS was to cover Government employees and Workers of unorganized sectors. NPS has been made available to every citizen from 1st April, 2009 on a voluntary basis.

More Details are available at official website for NPS:

NPS is Good for tax saving as u/s 80CCD(1) employees contribution is exempted (within overall limit of Rs. 1Lac u/s 80C). Also Employer Contribution (upto 10% of Basic+DA) will be allowed as deduction u/s 80CCD(2) wef FY 11-12.

When I checked with their office, they replied if You are covered by FPF (RPFC), you will not be eligible for NPS. But a few days ago I read an article in ET that corporates are joining NPS.

There is Tax advantage in initial stage as well good pension amount at retirement as contribution would be greater than FPF’s 541/- p.m. , But since this is market driven scheme so Risk is also greater.

That’s why I was keen to know, If there is any change in status. Can We opt for both options. And if Choice to be made between Employees Pension scheme and NPS which would be better, should we stay with RPFC or switch to NPS?

Thanks for your Time !

Sukhvinder Singh

From India, Delhi
employee pension scheme is better and you you can not be covered under this new scheme it has implimented to unorganised sector where i feel it applicable to those employees whose PF is not deducted.

From India, Delhi
Thanks for the reply. also I think we should wait for couple of years to observe the performance of NPS even government allow the companies to join the scheme if exit from EPF.
Sukhvinder Singh

From India, Delhi

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