No. 25014/14/2001-AIS (II)
GOVERNMENT OF INDIA
Ministry of Personnel, Public Grievances & Pensions
Department of Personnel & Training
Norht Block,New Delhi,
the 8th September, 2009
The Chief Secretaries,
All the State Governments/UTs
Subject:-Introduction of New Pension Scheme for Members of the All India Service joining the All India Service on or after 1/1/2004.
The undersigned is directed to say that the pension of the members of the All India Services appointed on or after 1.1.2004 is regulated by the new Defined Contribution Pension Scheme (known as the New Pension Scheme) notified by the Ministry of Finance (Department of Economic Affairs) vide their O.M. No. 5/7/2003- ECB 2 PR dated 22.12.2003. On introduction of the New Pension Scheme, the All India Service (Death Cum retirement Benefit) Rules, 1958 and the All India Service (Provident Fund) Rules, 1955 were amended on 7.02.2004 & 17th May 2004 respectively. Under the amended Rules, benefits of the old Defined Benefit Pension Scheme and of GPF are not available to the members of the service appointed on or after 1.1.2004.
2. The New Pension Scheme will work on a defined contribution basis and will have two tiers – Tier I and II. Contribution to Tier I will be mandatory for all members of All India Services joining the All India Service on or after 1/1/2004, whereas Tier II will be optional and at the discretion of members of All India Service.
3. In Tier I, members of All India Service will make a contribution of 10% of his/her basic pay plus DA, which will be deducted from his/her salary bill every month by the DTO/TO concerned. The Government will also make an equal matching contribution..
4. Tier I contributions (and the investment returns) will be kept in a non-withdrawable pension Tier I account. Tier II contributions will be kept in a separate account that will be available for withdrawal at the option of the member of the Service. Government will not make any contribution to Tier II account.
5. A member of the service can exit at or after the age of 60 years from the Tier I of the scheme. At exit, it would be mandatory for him/her to invest 40 percent of pension wealth to purchase an annuity (from an IRDA regulated Life Insurance Company), which will provide for pension for the lifetime of the employee and his dependent parents/spouse. In the case of members of the All India Service who leave the Scheme before attaining the age of 60, the mandatory annuitisation would be 80% of the pension wealth.
6. Recoveries towards Tier I contribution will start from the salary of the month following the month in which the member of the service has joined service. No recovery will be made for the month of joining.
7. As the existing provisions of Defined Benefit Pension and GPF would not be available to new members of All India Service joining All India Service on or after 1/1/2004, in case any GPF deduction has been made then it would have to be refunded to the concerned All India Service Officers.
8. Deduction towards Group Insurance will, however, continue to be made from the salary of new members of the All India Service joining the service on or after 1/1/2004.
9. The State Service officers appointed to the IAS/IPS/IFS by way of promotion/selection, who are already covered under the old pension scheme will continue to be governed by the old pension scheme.
10. The pension funds of members of the All India Service would be managed by pension fund managers nominated by the Pension Fund Regulatory Development Authority (PFRDA) and the records would be maintained by a Central Record Keeping Agency, the National Security Depository Limited (NSDL).
11. All State governments would be required to designate a State Nodal Officer (SNO) at the State capital for all NPS related activities. District Treasury Officer (DTO)/Treasury Officer (TO) would be entrusted the responsibility of deducting the amount of employee's subscription from the salary of the AIS subscriber and would forward the same to the State Nodal Officer.
12. The amount and contribution details from each of the TO would be consolidated for all subscribers by the designated State Nodal Officer at the State capital. The SNO would also compile and consolidate Employers contribution.
13. The designated officer in the State Nodal Office would prepare and upload the Subscriber Contribution file (SCF) on CRA system; transfer funds to the Trustee Bank and send information to Department of Personnel & Training for control purposes.
14. Immediately on joining the All India Service, each member of the service will be required to provide particulars such as his/her name, designation, scale of pay, date of birth, nominees (s) for the fund, relationship with the nominee etc. in the prescribed form (Annexure-I). The same procedure should be followed for all AIS officers appointed on or after 1.1.2004. Accordingly all AIS officers recruited on or after 1.1.2004 are advised to fill up the registration form at Annexure-I immediately.
15. The DTO would be responsible for getting the physical registration form filled by all AIS officers and would also fill up their own registration form (DDO registration form) and send it to the State Nodal Officer (SNO). The State Nodal Officer would act as the PAO in the NPSCAN. He would collate the physical registration forms and also fill up the registration form for the PAO and send all these filled forms to NDSL preferably within a month of issuance of these orders. NDSL would process the details and send all the kits to the SNO by the end of October 2009.
16. On receipt of the Permanent Registration Allotment Number (PRAN), the SNO would start the regular uploads and funds transfers. After this is done the legacy data would be send in one or maximum two tranche.
17. For the legacy data, the DDOs would then prepare the arrears-SCF for month wise contribution details and send the same to SNO who will upload the same to NPSCAN and transfer the funds.Accounting procedure for the above would be devised by the State Government in consultation with Accountant General.
18. Payment to Trustee bank: The salary bills and the bills for Government contribution will be passed by TOs after exercising the checks prescribed under financial rules and Treasury Manual. The amount of NPS subscriptions (member contribution) recovered from the salary bills will be shown under the “Recoveries” column of the salary bill and will be classified under the Head “8342-Other Deposits-00-117-Defined Contribution Pension Scheme” in the State Section of Accounts by opening suitable separate sub-heads thereunder for “01-Government Servants Contributions under Tier-1” and “02-Government‟s Contribution under Tier-II”. The amount of Government‟s Contribution shall be debited to “2071-Pension Scheme -01-Civil-117-Contribution for Defined Contribution Pension Scheme-01 –Government Contribution– 00.04-Pensionary Charges” in the Consolidated Fund of the State Government.
19. After the bills are passed, the SNOs will upload the data relating to contributions (both of members of service‟s and Government‟s contributions) into NPSCAN of NDSL and also tally the figures uploaded with that booked. Further, all the accumulated balances under the DCPS would be transferred to the Trustee bank i.e. the Bank of India.
20. After uploading is completed, SNO will get Transaction ID and draw the total amount by minus crediting the head mentioned above either by cheque in favour of the Trustee Bank or remit the amount through RTGS/NEFT. SNO will also ensure the amount of contributions booked is duly tallied with the Subscriber's Contribution File (SCF) being uploaded in the NPSCAN and the same amount is drawn in the Cheque and passed on to the Trustee Bank.
21. The SNO/TO would have to maintain the Alphabetical Index Register in Annexure V wherein they would have to indicate the PRAN numbers allotted to each of the subscriber; the particulars of remittances of contributions to the Trustee bank in the Proforma prescribed vide Annexure VI; and the individual-wise account indicating the amounts of contributions paid to the Trustee Bank and the details of remittance.(vide Annexure VII).
22. In order to enable NSDL to carry out reconciliation and credit the amounts against the individuals‟ accounts, Treasury Officers/ SNOs will have to ensure that their TO Registration numbers / SNO Registration numbers respectively and the month to which the contributions pertain /Transaction ID in NPSCAN are mentioned in the NEFT / RTGS application form (in the 'Remarks' column) to be submitted to their banker. Where payments are made through cheques in favour of the Trustee Bank, these particulars would have to be furnished on the reverse of the cheque as well as in the forwarding letter. The time schedule prescribed will have to be strictly adhered to by SNOs, TOs and DDOs.
23. The SNO along with the State Government would have to ensure that arrears of contributions both of Government and Subscribers, are recovered and transferred to the trustee bank within a definite time span. If the contributions have been recovered but kept elsewhere, then also they must be transferred immediately to the Trustee Bank.
24. If the State Governments decide to recover the contributions in instalments, it may be ensured that the instalments of Government contributions drawn and transferred to the fund do not exceed the individual's contributions.
25. In the case of post 01.01.2004 entrants into the service, whose contributions to NPS are yet to be deducted, the State Government may consider deducting their contribution (arrears from 01.01.2004 or from their date of entry into service) from the second instalment of arrears of revision of pay due on account of the 6th Pay Commission recommendations. Further the pay arrears may be released only after individual application forms for registration to the New Pension Scheme have been obtained by the DDO/SNO from the concerned member of the service.
26. Whenever any member of the service is transferred from one office to another or goes on Central deputation etc, the TO will indicate in the Last Pay Certificate of the member of the service, the PRAN in respect of that individual and the month up to which his contributions have been recovered/ drawn. 27.Accountant Generals/Finance Departments of all State Governments are requested to bring these instructions to the notice of their TOs\DDOs\ SNOs for strictcompliance.