The Government of India has approved an increase in the employer’s contribution to the National Pension Scheme (NPS) for employees working in Regional Rural Banks (RRBs). Earlier, employers contributed 10% of the employees’ Pay and Dearness Allowance (DA) to their NPS accounts. With this new decision, the contribution has been raised to 14%. This change has been made effective from November 11, 2020.
The Ministry of Finance, Department of Financial Services, has officially communicated this decision through a letter addressed to the Chairman of NABARD. The letter, signed by Under Secretary Ratnakar Jha, instructs NABARD to inform all RRBs and their sponsor banks about this revision. NABARD has also been asked to ensure the proper implementation of this revised contribution system.
This increase in contribution will benefit employees of RRBs by improving their retirement savings. A higher employer contribution means that employees will have more financial security after retirement. This move also brings RRB employees’ pension benefits in line with central government employees, who already receive a 14% contribution from their employers.
With this approval, NABARD will now take steps to inform all concerned banks and ensure that employees receive the revised benefits from the effective date. Further instructions on how this revision will be implemented may be provided by the authorities in the coming days.
