Benefits of Pension Scheme for Government Employees
- DetailsWritten by PolicyBazaar -
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Updated date : 08 November 2019
When it comes to securing the future and the life of their employees, nothing comes near the Central Government organizations. As soon as you are in such a job, your life is completely secure. There are numerous financial benefits and not the least of which is their pension scheme. This is the reason why so many people swear by such jobs. Those who are unable to find employment with the Central Government rue this fact and every other person who is presently working, and for good reasons too.
The new pension scheme gives much to rejoice for the employees who are currently working for the Central Government. Here are some of the associated benefits.
Increased pension cover
Before the current pension scheme came into being, only around 11% of people working in India came under this post job security net. However, the new scheme is all set to include an increased number of people under its wings and increase a sense of security. The current financial scenario has increased the living expenses to a high degree and this increases insecurity among the masses. The central government pension scheme is to infuse confidence with a secured future in the times to come.
Far reaching potential
If you are to believe the government sources, the current pension scheme has far-reaching potential. Besides the people working in government agencies, this scheme is all set to provide security to those employed in private organizations and even the self-employed categories. This is really news to rejoice for the people of India.
Flexible schemes available for investment
Under this policy, the employees are completely free to invest in any of the available options for ensuring the growth of their money. There is a monthly contribution involved with 10% of salary plus the DA. The government is going to contribute an equal share to the pension fund for maximum profits in the coming times. There are different percentages allocated under the three schemes for investment that includes government securities, corporate bonds that are investment grade, and equity investment. It is up to the individual to make the final choice.
Setting up of voluntary withdraw-able account
Besides the existing pension scheme, those interested can also go for a separate account for their pension, which is completely withdraw-able whenever the employee sees it fit. However, there is not going to be any contribution from the side of the government in such accounts. Here the reigns of operation remain in the hands of the individual without central government interference.
Voluntary withdrawal from the scheme
Employees who complete service tenure of 60 years can withdraw from the pension scheme at any time they choose. However, before that they need to purchase an annuity worth 40% of their pension wealth at the time of withdrawal.
While detractors of this new pension schemes consider that the risk outweighs the benefits, the opposite mostly seems to be true. This retirement planning is flexible, with a plethora of investment choices, and is in keeping with the growth and prosperity of the nation as a whole. What else can you ask for?
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