National Pension System: Employer’s NPS contribution raised to 14% for employees of Central Autonomous Bodies

By: |
September 10, 2021 1:44 PM

NPS rules for employees of Central Autonomous Bodies (CABs): The Ministry of Finance has now allowed the contribution of 14% employer's share towards NPS accounts of employees of CABs.

npsNational Pension System (NPS). Representational image

NPS rules for employees of Central Autonomous Bodies (CABs): The Ministry of Finance has now allowed the contribution of 14% employer’s share towards NPS accounts of employees of CABs.

Through a notification dated 31st January 2019, the Central Government had enhanced the employer’s share of contribution for Central Government NPS subscribers from 10% to 14%. However, as the employees of CABs are not Central Government Employees, 14% employer’s share rule didn’t apply automatically for them.

CABs are financially dependent on grant-in-aid from the Central Government. Any such enhancement in the employer’s contribution having budgetary implications warrants prior approval of the Central Government. It was observed that despite no prior sanction from the Ministry of Finance, the employer’s contribution was enhanced to 14% of Pay and DA in respect of employees of a number of CABs. The Government was informed that “such internal and suo-moto decisions by the CABs/ Administrative Ministries are contrary to the Delegation of Financial Powers and tantamount to unauthorized expenditure.”

However, after examining the issue, the 14% employer’s contribution rule has now been extended for employees of CABs.

“The issue has further been examined by this Department and taking into consideration all the factors, it has been decided that the notification dated 31.01.2019 may be extended to the employees of Central Autonomous Bodies,” Department of Expenditure, Ministry of Finance said in an Office Memorandum dated 26th August 2021.

“The date of effect will be same as applicable in case of Central Government employees i.e. 01.04.2019. The administrative Ministry/ Departments are directed to ensure that while implementing the enhanced share of contribution among the autonomous bodies, the financial implications shall be borne by the Government in the same manner, as was decided to be borne while implementing the pay revision benefits to employees of autonomous bodies in terms of the 7th CPC recommendation as enumerated vide this Department’s order,” the Office Memorandum further said.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1How technology is changing commercial real estate in a post-Covid world
2Buy Now Pay Later: What it is and how to maximise its benefits
36 examples of embedded finance that will transform the near future