NPS-Corporate Sector Model: PFRDA has brought separate pension model for employers, know what are the benefits

0
115

The Pension Fund Regulatory and Development Authority (PFRDA) has come up with a separate pension model for employers ie corporate bodies, central public sector bodies, PSUs, etc., to enable them to adopt NPS as a retirement benefit scheme for their employees. This model is known as the NPS-Corporate Sector Model. Let us know what are the benefits for employers in this model.



Easy to adopt

NPS can be offered by an employer / corporate (entity) to its employees (as a retirement benefit scheme) on a voluntary or compulsory basis within the scope of their employer-employee relationship.

Also Read: Important news! Drivers take advantage of malfunction in Ola app, double fare is being charged from customers

Economical

Employers giving NPS benefits to their employees in the form of retirement benefit plans do not require confidence building and taking care of them, managing funds or record keeping activities.

Flexible

It is not mandatory for the employer to contribute to the NPS account of the employees. Contribution to NPS depends on the employer’s policy on extended retirement benefits for the employer and its employees. The NPS contribution can be as follows. (i) Equal contribution of both employer and employee (eg- 10-10% by both) (ii) Unequal contribution by employer and employee (eg- 10% by employee and 14% by employer) (iii) Employer only or employee only contributed by.



Tax benefits

An employer registered with NPS can claim tax benefits on behalf of employees for the amount contributed to NPS. Under Section 36 (i) (iv) (A) of the Income Tax Act, 1961, employers can claim tax exemption for up to ten percent of salary (basic and DA) in the NPS account of the employees.

Additional avenue

NPS can be offered as an additional avenue for retirement planning and can be provided along with any other pension plan (s) including statutory pension / provident fund.

Election

Employers can opt for pension funds on behalf of their employees and make asset allocation. Or these options can be left to employees.

LEAVE A REPLY

Please enter your comment!
Please enter your name here