What your monthly pension will be under the EPS scheme depends on your pensionable salary and your service period (ie how many years you have been employed).
FDI means foreign direct investment means foreign direct investment. If a foreign company invests its money in an Indian company, it will be called FDI. According to the central government, the FDI limit is increased to promote foreign investment in many sectors for the country’s economy. For the moment, here we will talk about the pension sector. The government can also increase the FDI limit to 74 percent in the pension sector.
A bill in this regard can be introduced in the Monsoon Session of Parliament. In which there will be a proposal to raise the existing 49 percent limit to 74 percent in the pension sector. Explain that about 8.5 crore people in the country are connected with NPS i.e. National Pension Scheme and EPS i.e. Employees Pension Scheme.
As of February 2021, 4.15 crore people have joined the NPS, while over 4.50 crore people are contributing to the EPS. That is, the proposal to increase the FDI limit in the pension sector is connected to these 8.5 crore people in one way or the other.
First of all, understand the arithmetic deducted from salary
If you are employed, then the amount deducted from your salary is divided into two parts. One part goes to the Provident Fund ie EPF and the other part goes to Pension Fund ie EPS. In this, 12 per cent of the total amount is deposited in EPF on behalf of the employee. At the same time, 3.67 percent is deposited by the company in EPF, while the remaining 8.33 percent is deposited in the Employee Pension Scheme (EPS). There is a maximum limit of Rs 1,250 in it every month.
How is a pension fixed?
What your monthly pension will be under the EPS scheme depends on your pensionable salary and your service period (ie how many years you have been employed). The formula for calculating the monthly pension amount of a PF account holder member is determined like this. The pension amount is known by dividing the salary in the year of job by 70. For example, if your basic salary is 10 thousand and you have worked for 35 years, then your pension will be: 10,000 X 35/70 = 5,000 rupees.
What can be the effect on you in the future?
Gurugram-based personal finance adviser CA Amit Ranjan explains that if the government increases the FDI limit in the pension sector to 74 per cent, it will not directly affect the common man. The reason is that the foreign share will be in the pension fund management ie the government’s earnings. He said that when there is foreign investment, the management of the pension sector can be better. If the new technology comes, the common man will be comfortable.
Will National Pension System be different from PFRDA?
There is also a discussion that the National Pension System (NPS) Trust can be brought under the Charitable Trust or Companies Act. However, even if this happens, there will be no impact on your investment. The government takes such steps to reduce the burden of its undertaking. Explain that under NPS, accounts can be opened in all government and private banks. People between 18 and 60 years of age can invest in it.
