Finance secretory, Pension scheme may see mandatory enrolments, what will be the schemes in Budget 2020?
The government is considering mandatory enrolments of workers in the pension scheme when they join the work sector. While giving the flexibility to let them decide their contribution. In fact, this is a part of the government’s plan to provide social security for millions of workers.
The finance secretary on Pension scheme may see mandatory enrolments, the schemes in Budget 2020
Finance Secretary Rajeev Kumar said, “There will be a system of auto-enrolment and an employee can contribute Rs 100 while the employer can also contribute”. Also, he added, people who are young today need to save for tomorrow. In the Union Budget 2020, the government has also provided a plan. That will provide attribution of schemes and safeguards the accumulated corpus.
Currently, insurance companies, mutual funds as well as companies operating under the National Pension System regulated by the Pension Fund Regulatory and Development Authority of India. Also, the Employees Provident Fund Organisation provides Employees Pension Scheme by transferring a part of the employee’s. As well employer’s contribution in addition to the Employees State Insurance Corporation.
Budget 2020: Read in detail
The government is looking at the pension sector as a large fund flow that will encourage long-term investors to put in their money into infrastructure and other sectors.
The pension regulatory agency had been set up a decade ago. But, despite tax benefits, the scheme has not taken off.
Kumar said that the government has taken a lot of measures in the Budget to ensure that the cost of financial intermediation comes down.
