NEW PENSION SCHEME-TO COVER 400 MILLION WORKERS

The Union government, through the Pension Fund Regulatory and Development Authority (PFRDA), is set to introduce new pension scheme aimed to cover a large number of the workers in the unorganized sector. Most of the workers to get benefit from the scheme are illiterate and financially incapable to meet minimum requirements to qualify under any pension scheme.

The low cost pension scheme, under which threshold limit has been reduced even below Rs 6000, is expected to cover approximately 400-million workers. Under the new scheme, the threshold has been worked out to the 16 per cent of the annual income of an individual, the limit which most of the workers can easily afford.

The new proposals empower an NGO or a self-help group to open an account with the NPS and it would be responsible for choosing investment option suitable for any individual. Workers would have sub account containing all details of transactions.

An account holder would have to pay Rs 50 for opening an NPS account besides annual transaction fees of Rs 350 to the National Securities Depository Ltd. A PFRDA official said, "The charges would be the same as that for individual account holders, but it would be paid by the NGO."