CPS Contributory Pension Scheme Details. INTRODUCTION: The Contributory Pension Scheme defined as a New Pension Scheme for all Government servants joining Government service on or after 1-1-2004 (central Govt employees).The existing provisions of Defined Benefit Pension and GPF would not be available to the new recruits in the central Government service, i.e. to the Government servants joining Government service on or after 1-1-2004.
CPS Contributory Pension Scheme will have two tiers i.e. Tier-I and II:
I) TIER-I: (CPS Contributory Pension Scheme)
1. A Government servant will have to make a contribution of 10% of his basic pay plus DA, which will be deducted from his salary bill every month by the PAO concerned.
2. The Government will make an equal matching contribution.
3. There will be no contribution from the Government in respect of individuals who are not Government employees
4. Tier-I contributions (and the investment returns) will be kept in a non-withdrawable Pension Account.
II) TIER-II: (CPS Contributory Pension Scheme)
1.contributions will be kept in a separate account that will be withdrawable at the option of the Government servant.
2. The government will not make any contribution to the Tier-II account.
In order to implement the Scheme, there will be a Central Record Keeping Agency (CRA) and several Pension Fund Managers (PFM) to offer three categories of Schemes to Government servants, viz., options A,B and C based on the ratio of investment in fixed income instruments and equities.
The participating entities (PFMs and CRA) would give out easily understood information about past performance so that the individual would be able to make informed choices about which scheme to choose.
CPS Contributory Pension Scheme in AP and Telangana States:
The New Pension Scheme was started by the Central Government from 1-1-2004 and by the A.P State Government from 1-9-2004 and it is called as CPS (Contributory Pension Scheme).
1. Those who appointed in the joining Government service on or after 1-9-2004 have to come under the New Pension Scheme.(GO Ms No:653 Fin (Pen.I) Dept, Dt.22.9.2004) CPS in both Telangana and the Andhra Pradesh States
2. 10%of basic pay and DA is treated as contributory pension and rounded to the nearest rupee.
3. The deduction of 10% contribution from the salary of an employee is purely responsible for Drawing and Disbursing Officer(HM’s/MEO).
4. 10% amount deducted from the salary(B.Pay+DA).
5. The Government will add the same amount to their Contributory Pension Scheme Accounts (CPS accounts called PRAN).
6. Drawing Officer should annexure the schedule to the salary bill which is submitted to the treasury.
7. The number which is allotted by the CRA should be entered in the SR of the individual.
8. Concerned DTOs would give the annual slips of CPS .
9. The employees who are eligible for this scheme, should not apply for ZPPF/GPF.
STRUCTURE OF CPS Contributory Pension Scheme:
1. Under NPS, each subscriber would be allotted a unique 16 digit Permanent Retirement Account Number (PRAN).
2. This number would be portable. The records of transactions and investor would be maintained by a central record-keeping agency (CRA).
3. At present, NSDL is the CRA and in future, the number of CRA would be increased.
4. The subscriber has an option to invest with seven Pension Fund Manager (PFM).
5. He also has the option to choose any one or multiple PFM to manage his contribution.
6. These PFM will have 3 Kind of funds categorized as E for Equity fund, G for fund investing in Government Securities and C for Fixed income securities other than Government Securities.
The Complete details of the CPS Scheme and the investment strategy as follows
1. At present, there is only one default scheme for Tier I for Government employees.
2. In the default scheme, the contribution is allocated to three Pension Fund Managers (PFM)
a)SBI Pension Funds Private Limited.
b)UTI Retirement Solutions Limited.
c)LIC Pension Fund Limited.
3. On 25-05- 2012, Government has revised the allocation ratio of funds (contribution remitted by the DTA/DTOs) from 31:35.5:33.5 to 35:31:34 for the three PFMs – SBI, UTI and LIC respectively.
4. On 15-05- 2013, Government has revised the allocation ratio of funds (Contribution remitted by the DTA/ DTOs) from 35:31:34 to 33:34:33 for the three PFMs – SBI, UTI and LIC respectively.
5. At present the allocation of funds to three PFMs is as follows
a) LIC Pension Fund 33%
b) SBI Pension Funds Pvt Ltd 33%
c) UTI Retirement Solutions 34%
6. Each of the PFMs will invest the funds in the proportion of upto 55% in Government securities, upto 40% in Debt securities, upto 15% in Equity and upto 5% in Money Market instruments.
NEW PENSION SCHEME – MAINTAINANCE AGENCY:
1. State Government has entered into an agreement with N S D L (National Security Depositories Limited), Bombay to maintain PRAN accounts as Central Record Keeping Agency (CRA). Now, all the employees coming under the C P S (Contributory Pension Scheme) have to apply for PRAN (Permanent Retirement Account Number)allotted & maintained by NSDL, Bombay.
2. For this, NSDL has appointed KARVY Consultants as Facility Centres,
3. There are two Facility Centres
i) at Hyderabad and
ii) at Visakhapatnam.
4. Address of Karvy at Hyderabad and Visakhapatnam.
Address of Karvy Consultants Hyderabad:
HYDERABAD – KARVY CENTRE
8-2-609/K, Road #10, Banjara Hills
PIN CODE: 500034
STD CODE 040
Address of Karvy Consultants – Visakhapatnam:
VISHAKAPATNAM KARVY CENTRE
47-14-4, ESWAR PARADISE,
DWARAKA NAGAR MAIN ROAD
PIN CODE: 530 016
STD CODE: 0891-2752915 to 18
CONTRIBUTORY PENSION SCHEME (CPS) CREDIT HEAD OF ACCOUNTS
Head of Account Andhra Pradesh& Telangana State Govt.Employees
8342 Other Deposits
117-Defined Contribution Pension Scheme for Govt.Employees.
04-State Govt.Employees Contributory Pension Scheme.
001 – Employees Contribution.