Differences between NPS and Old pension system
Old Pension System (NCSRPF) | NPS |
1. Full form is Non Contributory State Railway Provident Fund | 1. Full form is New Pension Scheme |
2. Employees who join till 31.03.2004 are covered under this scheme. | 2. Employees who join on or after 01.01.2004 are covered under this scheme |
3. Defined Benefit Pension Scheme. Means Benefit (Pension) is fixed. That is 50% of last pay is defined as Pension | 3. Defined Contribution Pension Scheme. Here Contribution is defined i.e., 10% of Pay + DA. Unlike Old pension system, here benefit i.e., pension is not defined. It is based on investment returns along with accumulations until retirement age, annuity type and its levels.. |
4. Retirement Gratuity and Death Gratuity are available | 4. Retirement Gratuity is not available. But Death Gratuity is available. |
5. Commutation up to 40 % is available. Commuted portion shall be restored after the completion of 15 years. | 5. Commutation of Pension is not available |
6. Contribution to NCSRPF is 8.33% of Pay only | 6. Contribution to NPS is 10 % of Pay + DA |
7. No matching contribution from Employer. | 7. Matching contribution from Employer |
8. Managing the Funds: PF Trust appointed by Govt. | 8. Managing the Funds: Fund Managers approved by PFRDA - Provident Fund Regulatory Development Authority |
9. No Regulator | 9. Regulator: PFRDA |
10. Loan facility against PF amount is available. | 10. Loan facility of PF amount (not applicable) |
11. At the time of Retirement, received the whole amount lying in employees PF Account with interest accrued there on. Monthly pension @50% of last basic pay is provided by Employer | 11. At the time of Retirement: Withdraw 40 % of total amount lying in Account (Employees contribution and Employers matching contribution incl: returns on investments). 60% Amount to be invest in Pension Annuity Schemes in order to get the monthly pension |
12. Provision of Family Pension to the family members of deceased employee @ 30% last basic pay by Employer | 12. No provision of Family Pension. |
13. Tax liability: Exempt of tax on Contribution, Accumulation and Maturity also. | 13. Tax liability: Exempt on contributions made, Exempt on Accumulation and Taxed on Maturity. |
