Cabinet likely to discuss Pension Bill on Thursday

India’s government is likely to take a decision on the pending Pension Bill on Thursday. The union cabinet is expected to discuss foreign direct investment or FDI up to 26 per cent, according to sources. The meeting is also expected to discuss key provisions in the bill. These include assured returns to pension fund holders, permitting withdrawals from the individual pension accounts subject to purpose, frequency and limits.

Here are salient points of the bill to be discussed:

• The Pension Fund Regulatory and Development Authority Bill, 2011 seeks to give statutory powers to the interim authority set up in 2003. It also alters the name of the New Pension System to National Pension System (NPS).

• NPS is a ‘defined contribution’ scheme for all central government employees who joined after January 2004. It is implemented through a combination of retailers, pension fund managers, and a record keeper. This scheme is different from the earlier ‘defined benefit’ scheme.

• Under the NPS, every subscriber will have an individual pension account, which will be portable across job changes. The subscribers will choose fund managers and schemes to manage their pension wealth. They will also have the option of switching schemes and fund managers.

• The NPS was extended to all general citizens through central government notification in May 2009.