Govt employees happy with new NPPF scheme
January 16, 2009: The government employees are happy with the plan unveiled by National Pension and Provident Fund to calculate their pension on 40 percent average of the last 24 months’ basic salary and not on an employee’s last salary.
According to old scheme, the retired official was entitled to pension on 60 percent on average of monthly earning in his or her whole career in government service.
This new scheme has come into hot debate after hefty increase in salary of the government employees by the elected government thus increasing burden on NPPF when officials get retired.
NPPF will implement the new announcement from July this year, which will not include salary increased last year of the staffs getting retired before next fiscal year.
The new formula calculates 40 percent of the average salary for the last 24 months, which is then multiplied by the number of years in service and then divided by 30. The NPPF has assumed that most civil servants would have worked for 30 years before they retire.
However pension officials said that, for one to get a full 40 percent benefit, one has to work for 30 years.
There are 1,175 pensioners, including 356 civil servants and 29,718 pension members as of December last year. This year, 451 civil servants are expected to retire according to records with NPPF.
From July 2002 to December 2009, NPPF has paid a total amount of Nu 197.3 m as pension benefits and pays about Nu 6 m a month.