Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Employer’s NPS Contribution Increased To 14% For CAB Employees

The Ministry of Finance has now permitted the contribution of 14 per cent of the employer’s share towards National Pension System (NPS) accounts of employees of Central Autonomous Bodies (CABs).

Photo Credit :

1631270681_myDxom_cropped_2_.png

The Ministry of Finance has now permitted the contribution of 14 per cent of the employer’s share towards National Pension System (NPS) accounts of employees of Central Autonomous Bodies (CABs). 

 

Prime Minister Narendra Modi led Union Government had boosted up the employer’s share of contribution for NPS subscribers to 14 per cent which was at 10 per cent earlier. But, as the CABs employees are not Union Government Employees, the 14 per cent employer’s share rule does not impose automatically on them, stated the notification dated 31st January 2019. 

 

CABs are financially dependent on grants-in-aid from the government. Hence, these enhancements in the employer’s contribution also have budgetary implications that warrant the approval of the Union Government. Meanwhile, it came to notice that despite no prior sanction from the Finance Ministry, the employer’s contribution was increased to 14 per cent of Pay and DA in respect of employees of a number of CABs. The Government was informed that "such inside and suo-moto choices by the CABs/Administrative Ministries are in opposition to the Delegation of Financial Powers and equivalent to unapproved consumption."

 

But, after looking into the issue, a total of 14 per cent employer’s contribution rule has now been increased for CABs employees. 

 

In an Office Memorandum dated August 26, 2021, the Department of Expenditure, Ministry of Finance, said The Department had further examined the issue and taking into consideration all the factors, it has concluded that the notification dated 31.01.2019 may be extended to employees of Central Autonomous Bodies

 

The effective date will be April 1, 2019, as it is for Central Government employees.” The administrative Ministry/Departments are directed to ensure that the financial implications of the increased share of contribution among autonomous bodies are borne by the Government, in the same way, that the financial implications of pay revision benefits to autonomous body employees were decided to be borne by the Government in accordance with the 7th CPC recommendation as enumerated.


Tags assigned to this article:
ministry of finance