Employees of states that have opted out of the National Pension System (NPS) will continue to earn returns on their corpus, according to India’s pension regulator. Several states had previously opted out of the NPS, leaving state government employees uncertain about accessing their corpus held by fund managers. The regulator also urged banks and other intermediaries to enroll more private sector employees in the scheme. The NPS offers competitive returns and allows systematic withdrawal and retention of the corpus until the age of 75.
A Reserve Bank of India report on state finances advises against reverting to the old pension scheme, arguing it will limit growth and add to fiscal burden. The report suggests that states should avoid providing non-merit goods and services and subsidies. The report also recommends increasing tax revenue by states through measures like higher stamp duty and registration fees.
