Curious About the New Pension Scheme in Public Sector? Let's Discuss Gratuity Eligibility!

Hi all! Could anyone tell me about the New Pension Scheme (NPS) and how it will be implemented in Public Sector Companies? Will we be eligible for gratuity after that? Thank you!

Understanding the Employees' Pension Scheme 1995

The Employees' Pension Scheme 1995 is a part of the Employees' Provident Fund and Miscellaneous Provisions Act and has replaced the erstwhile Family Pension Scheme. (For more details, please refer to the relevant threads already posted on citeHR).

Gratuity and pension are independent and separate benefits. Therefore, your eligibility to receive gratuity will not be affected by pension.

Regards,
Abbas.P.S

Hi Abbas, thanks for your reply, but actually, I am asking about the New Pension Scheme which has been implemented since January 2004. In this scheme, employees who have joined the organization on or after January 2004 will be included, and they have to contribute 10% of their basic salary and DA every month to the Pension fund. The concept of the Provident Fund won't be applicable to such employees.

If anybody has some experience regarding this matter or any kind of knowledge about it, kindly discuss.

Introduction of the New Pension Scheme

The New Pension Scheme was introduced with effect from 01 January 2004, as per Notification 5/7/2003-ECB&PR issued on 22 December 2003 by the ECB&PR Division of the Department of Economic Affairs, Ministry of Finance, Government of India.

It is an initiative to minimize the burden of pension wealth on the Government Sector. Under this scheme, an employee has to contribute 10% of their salary (basic + GP + NPA, if any) every month. The government will also make a matching contribution, and the entire amount is to be deposited with the Trustee Bank (Bank of India) by the employer. NSDL has been appointed as the record-keeping agency for all pension information.

The money is then divided among the Pension Fund Managers (PFMs), who are responsible for buying assets (bonds, securities, etc.) with the money. Subscribers can choose their PFM/PFMs, and the ratio of distribution can be adjusted from time to time.

Please go through the following links, which will help you understand the complete details:

- [New Pension Scheme India (NPS) Details](http://www.onemint.com/2010/09/27/a-primer-on-the-new-pension-scheme-nps/)
- http://pfrda.org.in/

All the best.

We have implemented the EPF scheme for our employees since 1990. Is it mandatory for us to implement the National Pension Scheme or New Pension Scheme for our employees appointed after 2006? Or do we have to follow the EPF scheme as usual?

Thank you.