Chairperson of the Pension Fund Regulatory and Development Authority Yogesh Agarwal urged corporate entities on Monday to take advantage of tax benefits on contribution made by employees to the National Pension Scheme (NPS).
Speaking at an interactive session with members of the Bangalore Chamber of Industry and Commerce (BCIC), Mr. Agarwal pointed out that the employers’ contribution up to Rs. 10,000, on behalf of their employees, would be eligible for tax breaks.
The NPS, which has been operational since 2004, Mr. Agarwal said, is different from the scheme offered earlier. It is a defined contribution pension, and not a defined pension benefit scheme as was the case earlier.
Mr. Agarwal said the three States, which have not implemented the scheme – Kerala, West Bengal and Tripura – are also likely to join the other States in implementing the NPS for government employees. “Kerala is likely to join soon,” he remarked.
The cost structure of the NPS is much lower than other alternative pension plans, Mr. Agarwal argued. Moreover, subscribers can choose their fund managers, he added.
Kamma Narayana, Regional Provident Fund Commissioner, said the Employees’ Provident Fund Organisation is implementing the “second phase of its reforms,” after successfully completing computerisation of its systems. “A subscriber will have only one PF number, irrespective of where he is working. This will reduce the number of complaints about delayed settlements of those whose PF accounts have been transferred after they have moved over to another organisation,” Mr. Narayana said.
Rahimunnisa, Director, Employees’ State Insurance Corporation (ESIC), said the organisation covers 21 lakh employees in the State, which, inclusive of employees’ families, implied a coverage of 1.05 crore people. “The ESIC plays a significant role because it covers nearly 12 to 14 per cent of the people in Karnataka,” Dr. Rahimunnisa said.
