Punjab: Govt increases its share in New Pension Scheme by 4%

The 4% hike in the government’s contribution will put additional burden of ₹258 crore every year on the state exchequer over and above the earlier contribution of ₹645 crore per year

Accepting a demand of government employee unions, the Punjab government on Monday decided to hike its share in the National Pension Scheme from 10% of the basic pay and dearness allowance to 14%, in line with a move by the Centre, with effect from April 1 this year.

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The decision was taken at a meeting of council of ministers chaired by chief minister Captain Amarinder Singh.

The 4% hike in the government’s contribution will put additional burden of ₹258 crore every year on the state exchequer over and above the earlier contribution of ₹645 crore per year.

The decision is in line with the notification issued by the Union finance ministry on January 31.

Of the 3.53 lakh state government employees, 1.52 lakh are covered under the New Pension Scheme (NPS).

Last week, finance minister Manpreet Singh Badal said the state was facing financial constraints due to delay in release of ₹4,100 crore GST compensation by the Centre. He also sought a review meeting with the CM on the issue.

The government also agreed to give the benefit of death-cum-retirement gratuity to all state government employees recruited on or after January 1, 2004, and covered under the pension scheme, said an official spokesperson after the cabinet meeting.

In another decision, the cabinet gave ex-post facto approval to the department of finance proposal to allow implementation of the benefit of ex gratia to the dependents of employees recruited on or after January 1, 2004, who died in harness, on the lines of benefits extended under the old pension scheme.

The annual expenditure on account of contribution by the state @10% of basic pay plus DA for the employees covered under the NPS during 2018-19 fiscal was ₹585 crore and is expected to be ₹645 crore in 2019-20.