Accepting a major demand of various state government employee unions, the Punjab Government on Monday decided to increase its share in the New Pension Scheme (NPS), in line with the decision of the Government of India, with effect from April 1, 2019.
The Punjab Cabinet, led by Chief Minister Captain Amarinder Singh, has decided to hike the state's monthly matching contribution for employees under the NPS from 10 per cent to 14 per cent of the sum of Basic Pay and Dearness Allowance (DA).
This is in consonance with the notification issued by the Ministry of Finance, Department of Financial Services, Government of India, on January 31, 2019.
The government has also agreed to give the benefit of Death-cum-Retirement Gratuity to all the employees of the state government recruited on or after January 1, 2004, and covered under the New Pension Scheme, said an official spokesperson after the cabinet meeting.
In another decision, the cabinet gave ex-post facto approval to the Department of Finance's proposal to allow implementation of the benefit of ex-gratia to the dependents of employees recruited on or after January 1, 2004, who died in harness, on the lines of benefits extended under the old pension scheme
The total number of the state government employees is 3,53,074, of whom 1,52,646 are covered under the New Pension Scheme (NPS). The annual expenditure on account of contribution by the state at 10 per cent of basic pay and DA for the employees covered under NPS during the financial year 2018-19 was Rs 585 crore and during the Financial Year 2019-20 is expected to be Rs 645 crore.
Since the Punjab government has largely adopted the guidelines of Government of India as far as the NPS is concerned, the monthly matching contribution of the state government to 14 per cent of basic pay and DA for its employees covered under NPS will be enhanced with effect from April 1, 2019.
The annual financial implication of enhancement in the matching contribution will be Rs.258 crore over and above the earlier contribution of Rs 645 crore.
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