Budget 2024: Govt may offer 50% pension for central govt employees enrolled with NPS

With the upcoming Budget 2024 just weeks away, the government is considering a proposal to provide central govt employees enrolled with National Pension System or NPS with 50% of their final pay drawn as a pension.

This initiative aims to address concerns regarding pension payouts as per Times of India report.

The report further adds that despite this potential change, the government assures that the NPS will continue to offer attractive returns for long-term investors, particularly those who remain invested for 25-30 years and were recruited after 2004.

The proposal follows an announcement by Finance Minister Nirmala Sitharaman and the formation of a committee led by Finance Secretary T V Somanathan to review the NPS and its benefits.

The NPS is a defined contribution scheme, where employees contribute 10 per cent of their basic salary, matched by a 14 per cent contribution from the government.