apmsanantapur

Contributory Pension Scheme (CPS)

Information about Contributory Pension Scheme (CPS) introduced newly by Government of AP:

1.      Mandatory to all the new recruits who joined in service on or after 1-9-2004.

2.      Contribution:  10% of salary (Pay + DA) from the month of joining

3.      Equivalent amount will be contributed by the Government.

4.      The Scheme offers investment plans :

a.  Plan-I Would imply predominant investment in fixed income instrument and some investment in equity.

b.  Plan-II  Will imply greater investment in equity.

c.   Plan-III  Will imply almost equal investment in fixed income and equity. 
(As the PFRDA Bill is not passed, the exercise of options is not insisted upon as of now.  Default option is Plan – I.)

5.      The contributions of the employee and Government (10%+10%) are to be deposited in a 
    non-withdrawal pension Tier-I account.

6.      The employees can normally exit at or after 58/60 years from the Tier-I of the pension system.

7.      At exit, the employee would be required to invest 40% of pension wealth (mandatory), to
    purchase an annuity from an Insurance Regulatory Development Authority (IRDA) approved
    Life Insurance firm and the balance 60% will be paid in cash.

8.      The annuity will provide pension for the life time of the employee and his dependent parents
    and his spouse at the time of retirement.

9.       Contributions shall be credited to:

a.       8011 – Insurance and Pension Funds

b.      MH 106 – Other Insurance  and Pension Funds 

c.       SH (04) A.P. State Government employees Contributory Pension Scheme 

10.      Existing G.P.F. Rules/Pension Rules are not applicable to the members of the New Pension
      Scheme.

11.      The AG is required to adjust the Government Contribution and Employee contribution and
      transfer the same to the Pension Funds Regulatory and Development Authority or any agency
      authorized for this purpose, on monthly basis.