EPF or NPS - Moneylife

EPF or NPS - Moneylife


In the first place, as
the New Pension System(or its new avatar
‘National Pension System’) did not have the social security ingredients the
traditional ‘defined payment’ pension schemes had, and the scheme had more
similarities with Employees’ Provident Fund Scheme implementation by the
Employees’ Provident Fund Organisation(EPFO)since 1952 except in relation to
investment of funds in the equity market, there was no need for a new agency to
implement NPS. The task should have been given to EPFO with freedom to upskill
its workforce and acquire expertise from outside for investment management.
This would have reduced the chaotic situation faced by PFRDA when it was
hanging in the air without much legal support for about a decade. In
retrospect, the belated admission that no one is sure that NPS is a better
option than the existing provident fund scheme is to be welcomed. Moneylife
foundation, on its part, should advise employees not covered by traditional
pension schemes(which have certainty about ‘defined payment’) to include the cost
element to buy retirement benefit products when they negotiate wage packages
and individually decide the investment pattern of the savings meant for post-retirement
life based on assumed needs.
M G Warrier 


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