Pension scheme may see mandatory enrolments
TIMES NEWS NETWORK
New Delhi:03.02.2020
The government is looking at mandatory enrolment of workers in the pension scheme when they join the organised sector workforce, while giving them the flexibility to decide their contribution, as part of fresh efforts to provide a robust social security net for millions of workers, a top government official said.
“There will be a system of auto enrolment and an employee can contribute Rs 100 while the employer can also contribute. People who are young today need to save for tomorrow,” finance secretary Rajeev Kumar said. In the Union Budget, the government has announced the plan, which will provide for inter-operability of schemes and provide safeguards for the accumulated corpus.
Currently, pension plans are sold by insurance companies, mutual funds as well as companies that operate under the National Pension System regulated by the Pension Fund Regulatory and Development Authority of India. In addition, the Employees Provident Fund Organisation provides Employees Pension Scheme by transferring a part of the employee’s and employer’s contribution in addition to the Employees State Insurance Corporation.
The finance secretary said that the idea was to bring them all under one umbrella so that subscribers did not lose their money in case they switched jobs. Besides, the government views pension sector as a potential source of large fund flow that will also encourage long-term investors to pump money into infrastructure and other sectors.
The pension regulatory agency was set up over a decade ago to implement the NPS and provide low cost solutions for retirement savings. But despite tax benefits, the scheme has not taken off although the kitty has expanded to around Rs 4.2 lakh crore.
Kumar said the government has taken a series of steps in the Budget to ensure that the cost of financial intermediation comes down through measures such as the proposed bill for netting of financial transactions.
There are several steps to enhance liquidity in the system by introducing new tools and strengthening the existing ones.
Rajeev Kumar
FOR A BRIGHTER TOMORROW: The government, which is aiming to provide a social security net for workers, says people who are young today need to save for tomorrow
TIMES NEWS NETWORK
New Delhi:03.02.2020
The government is looking at mandatory enrolment of workers in the pension scheme when they join the organised sector workforce, while giving them the flexibility to decide their contribution, as part of fresh efforts to provide a robust social security net for millions of workers, a top government official said.
“There will be a system of auto enrolment and an employee can contribute Rs 100 while the employer can also contribute. People who are young today need to save for tomorrow,” finance secretary Rajeev Kumar said. In the Union Budget, the government has announced the plan, which will provide for inter-operability of schemes and provide safeguards for the accumulated corpus.
Currently, pension plans are sold by insurance companies, mutual funds as well as companies that operate under the National Pension System regulated by the Pension Fund Regulatory and Development Authority of India. In addition, the Employees Provident Fund Organisation provides Employees Pension Scheme by transferring a part of the employee’s and employer’s contribution in addition to the Employees State Insurance Corporation.
The finance secretary said that the idea was to bring them all under one umbrella so that subscribers did not lose their money in case they switched jobs. Besides, the government views pension sector as a potential source of large fund flow that will also encourage long-term investors to pump money into infrastructure and other sectors.
The pension regulatory agency was set up over a decade ago to implement the NPS and provide low cost solutions for retirement savings. But despite tax benefits, the scheme has not taken off although the kitty has expanded to around Rs 4.2 lakh crore.
Kumar said the government has taken a series of steps in the Budget to ensure that the cost of financial intermediation comes down through measures such as the proposed bill for netting of financial transactions.
There are several steps to enhance liquidity in the system by introducing new tools and strengthening the existing ones.
Rajeev Kumar
FOR A BRIGHTER TOMORROW: The government, which is aiming to provide a social security net for workers, says people who are young today need to save for tomorrow
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