Here are tips you need to know:
For each type of benefits, the requirements are different and one must know the formalities to be completed in advance
A member becomes eligible for pension after ten years of membership in the scheme, provided the member attains normal retirement age as per their respective service rules. A member may however avail monthly pension five years prior to attaining the normal retirement age. The monthly pension is reduced accordingly for the number of months falling short of normal retirement age.
Surviving Family Benefits
A member must have served for a minimum of three years to be eligible for surviving family benefits. Up to three children at a time of the deceased members, under the age of 18 years receive monthly pension are eligible for the benefit. The benefit amount is slightly higher for orphans.
Surviving spouse of a member is also eligible for monthly pension, in addition to the children/orphan benefit. Spouse of deceased armed forces personnel start receiving monthly pension immediately upon demise of member. Spouse of civil service members start receiving monthly pension only from the age of 50 years.
For deceased members having left only their surviving parents, the parents are eligible for monthly pension.
Pension formula and annual indexation
Monthly pension: Depends on the basic salary upon retirement and the number of years of service. Once started, pension is paid until the death of member and is indexed annually based on CPI, up to a maximum of 5%. Thereon, surviving family members are eligible to receive other pension benefit.
If you are nearing retirement and need to plan for it, here are some tips for you:
There are two two types of benefits provided by NPPF: Pension and Provident Fund.
Provident fund is paid in lump-sum i.e. accumulated contribution and rate of return. The rate of return is declared and credited to each individual account based on the investment performance. The rate of return is credited to contribution as well as accumulated interest.
Pension is a stream of income paid regularly to the members qualified for monthly pension with a minimum of 10 years of contribution and retired attaining the superannuation age. The benefit is defined by the formula that specifies the amount of benefit as percentage of basic salary.
For Civil Employees
Contributions after 30 years in pension is given as lumpsum
Early pension prior to five years of superannuation age is paid with reduced pension amount of 6% per annum.
Members who are not qualified for monthly pension are paid lump-sum benefit i.e. all the contributions and the rate or return.
You need to know the benefit you will receive. You will receive provident fund (Tier 2) in lump-sum i.e. all cYou need to know the benefit you will receive. You will receive provident fund (Tier 2) in lump-sum i.e. all contributions you have made during your service and interests earned. If you do not qualify to receive monthly pension, you will also receive lump-sum benefit from pension account (Tier 1) along with interest. You may choose to receive the benefit either in cheque or via fund transfer to your personal savings account.
If you are qualified for monthly pension, then you will receive your monthly pension benefit by direct transfer to your pension savings account.
Your monthly pension is subject to personal income tax like the tax you have paid while in service. The monthly pension will be deposited into your account, less all taxes and any deduction. If you are a member of Royal Society for Senior Citizens and Lotdeh Scheme, you will receive your monthly pension after deduction of your membership fee or contribution to Lotdeh.
You will receive your Pension Tax Deducted at Source certificate from NPPF or download from our website (Annual notification will be issued)