CPS COMPLETE INFO GUIDE


INTRODUCTION:


In the Budget for 2001-2002, the Government of India have announced that a new Pension Scheme based on defined contribution will be introduced to those who enter Central Government service. The Govt of India had constituted a High Power Committee with Sri B.K. BHATTACHARYA, former Chief Secretary, Government of Karnataka as Chairman to go into pension reform with the specific reference to recommending a contribution scheme. Based on the recommendation of the above Committee, Government of India introduced a CONTRIBUTORY DEFINED BENEFIT PENSION SCHEME primarily guided by the long-term fiscal interest of the State with effect from 1-1-2004.

A New Contributory Pension Scheme based on defined contributions will be introduced to all the newly recruited employee. This will apply to all the employees who are recruited on or after 1-9-2004 and whose pay and allowances are drawn from the Consolidated Fund of the State, including all the new recruits of all the tiers of all the Rural and Urban Local Bodies, Universities etc.,

As per G.O. 654 under the new Contributory Pension Scheme introduced to the Central Government employees, General Provident Fund Scheme is not applicable to the newly recruited employees. AP Government have examined the issue in respect of the State Government employees including all the new employees / posts, whose pay and allowances are drawn from the Consolidated Fund Scheme willnot be applicable to the newly recruited employees who are covered under Contributory Pension Scheme introduced with effect from 1-9-2004.

As per G.O. 655 Contributory Pension Scheme introduced with effect from 1-9-2004.

Present there is only one default scheme for Tier I for Government employees. In the default scheme, the contribution is allocated to three PFMs. 1. SBI PENSION FUND PRIVATE LIMITED 2. UTI RETIREMENT SOLUTIONS LIMITED 3. LIC PENSION FUND LIMITED. The allocation of funds to three PFMs: LIC 33%. SBI 33%. UTI 34%.

Each of the PFMs will invest the funds int he proportion of upto 55% in Government securities, upto 40% in Debt securities, upto 15% in Equity and upto 5% in Money Market instruments.


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