Pension Computation Demystified
Pension Computation Demystified : the Example of Central Govt. Pensioners
As the time for retirement from any service approaches, an employee of any organization gets busy estimating his retirement and post-retirement dues. Of these, ‘gratuity’ and ‘provident fund’ are lump sum benefits available immediately, as also a portion of ‘pension’, which is ‘commuted’. The balance portion of pension not commuted will be available to the retired employee, or ‘pensioner’, as we may call him/her, as a stream of monthly incomes over his lifetime, or over the lifetime of his/her surviving dependent ‘family member’ eligible to receive the same under the organisation’s Pension Rules.
The most well-defined Pension Rules, with amendments in line with ‘pay’/’wage’/’salary’ revisions from time to time, have been for employees of various Central Govt. departments or wings, including Defence or Armed Forces. These rules and periodic amendments are closely followed by Public Sector Units (PSUs) or ‘autonomous bodies’ and then private sector organizations, generally with a time-lag. Therefore, it may be worthwhile to comprehensively summarise the evolution and changes or revision in pension computation for Central Government employees, to enable the average anxious employee on the verge of retirement to better appreciate the method of pension computation and related choices and procedures resting on him/her and on others. Hence this Article, which concentrates on pension for Central Govt. pensioners. But basically the same rules, procedures and periodic revisions apply to Public Sector Units (PSUs), especially banks and insurance companies.
1. What is Pension?
‘Pension’ may be defined as a post-retirement monetary benefit, which a retired employee of an organization receives from the employer over equal intervals of time, usually monthly. It is distinct from one-time ‘lump-sum’ compensation like ‘gratuity’ or contributory (i.e, in return for deduction of certain % of ‘pay’ or ‘salary’, as defined under the concerned rules, every month) ‘provident fund’, abbreviated as CPF. The scheme of providing ‘pension’ in lieu of CPF came into effect for Central Govt. employees from 01.01.1986. Existing employees as on that date were given the option to remain with the CPF Scheme or come over to the Pension Scheme from that date, but new employees recruited on or after 01.01.1986 were compulsorily brought under the Pension Scheme instead of CPF. W.e.f. 01.04.2004, new recruits to Central Govt. services except Defence have been brought under a ‘New Pension Scheme’ (NPS), where an employee have to contribute 10% of their salary and dearness allowance to enable the Govt. to buy an annuity to generate a stream of monthly pension for the employee on his/her retirement.
2. Pension Disbursement Procedure
As of now, a retired employee may collect ‘pension’ either from a chosen or designated office of his employer, or from an office of an intermediary, like ‘Life Insurance Corporation of India’ (LIC) or a bank. When LIC is chosen by the employer as the intermediary, it usually deposits, on behalf of the retired employee, a one-time lump-sum amount called ‘annuity’, which should fetch LIC a periodic return equal, or slightly more than, the periodic pension amount to be paid, so that LIC can at least cover the labour and other costs of investing the ‘annuity’ wisely and process the periodic release of pension to the ‘pensioner’ (i.e, the retired employee getting pension). Mostly, the pension cheques are sent by post to the pensioner’s address as disclosed just prior to retirement and forwarded by the employer to LIC, or, in terms of modern banking practices, LIC transfers the amount on a stipulated periodic date, usually the 1st of every month, to the pensioner’s ‘Account’ in a bank branch of the pensioner’s choice through ‘electronic clearing service’ (ECS).
However, Central Govt. has designated a no. of nationalized banks according to districts and States, to credit the pensioner’s ‘Account’ in the bank branch he chooses among these designated bank branches. Govt. periodically reimburses the bank for the amount so credited, on the basis of Accounts statements submitted regularly by Head Office or any other designated ‘link’ branch or office of the bank, after collecting branch-wise details of such disbursement. Thus, the bank branch concerned mobilizes deposits in accounts of a large no. of accounts of pensioners, who must open such accounts for crediting monthly pension in the accounts.
Disbursement though banks and PPO
(i) Whenever an employee of any Govt. Dept. or organization retires, he or she opts for a particular branch of a particular bank, where he has an ‘Account’ into which the pension due is to be credited every month. If the pensioner or his nominated surviving family member wants to change his or her option afterwards, he/she intimates the new bank and branch of his choice to the bank branch of his earlier choice, and this branch is obliged to communicate this choice to the new bank branch chosen, along with all relevant documents.
(ii) The basic document for computing pension according to the procedures discussed so far is the ‘Pension Payment Order’ (PPO), issued for each pensioner immediately after retirement, and then every time there is a revision in pension computation, or in ‘dearness relief’. Each such PPO is to be routed by the Pay and Account Office of the pensioner’s employing organization to the ‘Central Pension Accounting Office’ (CPAO) of the Central Govt., then to a designated ‘link’ branch of the bank chosen by the pensioner, and lastly to the particular disbursing bank branch (like Bagha Jatin branch of SBI at Kolkata) chosen by the pensioner, for crediting the pensioner’s ‘savings’ or ‘current’ account with the branch. This PPO gives the ‘basic pension’, ‘dearness relief’, category of pension (whether ‘pension’ to pensioner himself/herself or to surviving family members of deceased pensioner), other components of pension, and total pension, all computed as per the latest Govt. guidelines circulated vide O.M.s of the Ministry of Personnel, Public Grievances & Pensions, as also of Finance Ministry O.M.s.
(iii) The disbursing branch of the concerned branch accordingly computes ‘net pension’ payable after deducting ‘commuted pension’ and ‘tax (to be) deducted at source (TDS)
3 Rules & Procedures
Pension computation rules and procedures for all the above Central Govt. Employees are governed by the ‘Central Civil Service’ Rules, or, in short, CCS (Pension) Rules, 1972, Central Civil Service (Extraordinary) Pension Rules, abbreviated as CCS (EOP) Rules, and CCS (Commutation of Pension) Rules, 1981, read with further circulars issued periodically vide ‘Office Memorandum’s (O.M.s) of the Ministry of Personnel, Public Grievances and Pensions, Dept. of Pension & Pensioners Welfare, and Ministry of Finance, Dept. of Expenditure. Here, ‘CCS’ is the abbreviation for ‘Central Civil Service’. But basically the same rules have been followed in the case of Defence, Army, Railway, and Telecommunication personnel. However, while taking into account the above Rules and O.M.s issued before 01.09.2008, the present computation method implements the recommendations of the 6th ‘Central Pay Commission’ (CPC) recommendations in 2008 w.e.f. 01.01.2006, through basically 2 O.M.s:
(a) For pensioners who retired before 01.01.2006: O.M. No. 38/37/08 dated 01.09.2008, for pensioner who retired before 01.01.2006, i.e, on or before 31.12.05.
(b) For pensioners who retired after 01.01.2006: O.M. No. 38/37/08 dated 02.09.2008, for pensioner who retired after 01.01.2006
Further refinements have to be also considered in both cases as above in line with further O.M.s of later dates.
4 Classes of pension
Since the introduction of ‘pension’ for Central Government employees w.e.f. 01.01.1986, various types of pension have been classified, as summarized in the CCS (Pension) Rules, 1972 and CCS (EOP) Rules, and clarified/extended by further Ministry O.M.s. Besides, for each of these classes, there are 2 categories of pension: normal ‘pension’ received by a living retired employee, and ‘family pension’ for nearest dependent family member, as defined under the Rules, when an employee eligible for pension dies while in service or after retirement.
(i) Under CCS (Pension) Rules, the following classes of pension are defined:
Ø ‘superannuation’ pension applies when an employee retires after attaining the age as specified in the concerned service rules (ex.: 60 years in ‘civil service’)
Ø ‘voluntary retirement’ pension means pension on retirement by a person before attaining this age on health or other grounds
Ø ‘compensation pension’ applies when a person is forced to retire due to abolition of the post he was holding and does not accept a lower post as an alternative
Ø ‘compulsory retirement pension’ is the reduced pension for a person compulsorily retired as a ‘penalty’ for an offence according to he service rules of the Govt. Dept. concerned
Ø ‘invalid’ pension is applicable if a person retires from service prematurely due to physical or mental defect which prevents his continuing service, as certified by the specified medical authority.
Ø retired Central Govt. employees absorbed/re-employed in ‘autonomous bodies’ or PSUs may be eligible for monthly pension for the period after retirement from earlier employment with the Govt. till further absorption or re-employment as above. He/she can even continue to enjoy monthly pension from the old Govt. employer, if he does not opt for pension in the new organisation. Alternately, he/she will enjoy new pension benefits from the new employer from the day he/she joins it and foregoes continued receipt of old pension from his/her ex-Govt. employer.
(ii) Under CCS (EOP) Rules, a further class of ‘disability’ pension’ is payable for 60 - 100% ‘disability’, as certified by the specified medical authority, if the ‘disability’ is caused by the service itself; ex: hazardous working environment, accident while on duty, army or personnel wounded in war or in anti-terrorist operations. This ‘disability pension’ would be admissible in addition to ‘invalid pension’ under CCS (Pension) Rules, as a ‘disabled’ person would also be an ‘invalid’.
(iii) In addition, fixed ‘medical allowance’ of Rs. 300 and ‘attendance allowance’ at Rs. 300/- per month are also paid to pensioners who retired with certified ‘disability’ of 100%.
(iv) A fixed amount of ‘Personal Pension’ for employees who retired between 31.03.1985 and 31.121985. This would again be available in addition to other classes of pension applicable to the retired pensioner.
5. Pension Components and Computation
In terms of Pension Rules and O.M.s referred till now, basically, there are 3 broad components of pension: ‘basic pension’, ‘dearness relief’ and ‘commutation of pension’
a. Basic Pension
The 1st component of monthly pension received is ‘Basic Pension’. It is linked to ‘basic pay’/‘pay’ reached on retirement in the ‘pay grade’/’pay band’/’pay scale’ and corresponding ‘grade pay’ of a retiring employee
v For the purpose of pension, ‘non-practicing allowance’ of medical employees is also added to the basic pay’, wherever such allowance is enjoyed. But no other ‘special pay’ can be part of ‘basic pay’. The term ‘emolument’ is also use as equivalent of ‘basic pay’
v ‘Grade Pay’ is in the nature of a ‘fixed pay’, which is to be received by an employee in addition to the pay he receives at a particular stage of the ‘Pay Band/Scale’; the ‘grade pay’ remains the same irrespective of the stage the employee reaches in his ‘Pay Band/Scale’ after applying the applicable no. of increments – that is, the ‘grade pay’ is a fixed amount corresponding to a particular ‘grade’ or ‘post’, and not to a particular stage in the ‘Pay Band/Scale’
(i) Central Govt. employees who retired prior to introduction of the Pension Scheme w.e.f. 01.01.1986 but on or after 18.11.1960 were eligible for only an ‘ex gratia’ (i.e, without any link to any other criteria) monthly pension of various amounts prior to 01.11. 97, and Rs. 600/- p.m. w.e.f. that date. Similarly, if the retired employee retired and died before 01.01.1986, his/her dependent family member like widow or dependent child was eligible for ‘family pension’ of Rs. 150/- p.m. w.e.f 01.01.1986, and Rs. 605/- w.e.f. 01.11.1997.
(ii) However, computation of all classes of pension from 01.06.1972, the date from which the CCS (Pension) Rules, 1972 came into effect, have been formulated usually as:
Basic Pension = {(50% of the ‘basic pay’ last drawn at the time of retirement, or the average ‘emoluments’ for the last 10 months prior to date of retirement, whichever was higher, in the particular ‘grade/post’ the retiree was placed in these 10 months) x (no. of half-months of service completed in service + additional no. of half-months as ‘weightage’ for certain difficult assignments)/(33 x 2)}
Examples of exceptions would be:
Ø lower % for ‘compulsory retirement pension, but not less than 2/3 rd of the ‘normal’ pension the employee would have earned without ‘penalty’
Ø lower or higher % for certain categories of ‘disability pension’ – fixed ‘medical’ and ‘attendance’ allowances not counted in formula
Ø in case of ‘invalid pension’, pension @ 50% of last ‘basic pay’ would be payable for every 6 months’ completed service period, even if the minimum qualifying period of 10/20 years is not completed.
‘Basic Pay’ or ‘emoluments’ would in turn include last stagnation increment and ‘non-practicing allowance’ of medical employees.
As regards division by ‘33’, this was taken as the period of service which an employee was supposed to complete in service to get full pension, and reduced proportionate pension was to be allowed for length of service less than 33 years. The multiplication of ‘33’ by ‘2’ is to convert this no. of years to ‘half-months’. In the numerator, if the balance period completed over a full year or over 6 months as on date of retirement is more than 3 months, the balance period will be treated as another half month (ex: balance period completed 4 months = 1 ‘half-month’; balance period completed 9 months = 2 ‘half-months’).
The minimum service period (‘minimum qualifying service/period’) to be eligible for pension being 10 or 20 years, depending on nature of Govt. service in which pensioner was employed at the time of retirement. Ex: For employees in ‘civil service, the ‘minimum qualifying period’ is 10 years, whereas in the armed forces, it is 20 years. However, vide O.M. dated 02.09.2008 referred in para 2 (b) above, pensioners retiring on or after 02.09.2008 would be eligible for full pension, i.e, 50% of last ‘basic pay’ or average ‘emoluments’ for last 10 months, whichever is higher, without any proportionate deduction for less than 33 years of service by applying the multiplier, (no. of completed ‘half-months of service rendered)/66
A certain no. of years are added to actual service period rendered, as a ‘weightage’ for difficult assignments, like various no. of years for various ranks of military officers. The ‘qualifying service’ to be taken for computing ‘basic pension’ thus includes this ‘weightage’, while applying the rules as above. Apart from this, in certain cases like ‘disability pension’
(iii) In case of ‘family pension’, the applicable % of pre-retirement last ‘basic pay’ or last 10 months’ average emoluments of the earning employee, whichever was higher, would be usually 30%, instead of 50%. However, exceptions would be applicable as in the examples in 4(i) above.
b. Dearness Relief
‘Dearness Relief’ (DR) is the component of pension which takes care of the effect of price rise on pensioners.
(i) DR is generally revised by the Govt. with effect from the 1st of January and 1st of July every year, as a % of ‘basic pension’ (explained hereafter) of a pensioner for every 4 point increase in ‘All India Consumer Price Index’ (AICPI) for ‘Industrial Workers’ (IW) beyond a level of AICPI (IW) fixed at last Pay Revision of employees. The announcements on DR made periodically with revision in this Price Index are as a total % of ‘basic pension’ of the pensioner as last revised. This is in line with the same formula for ‘Dearness Allowance’ (as distinct from ‘Dearness Relief’), announced twice a year as a % of ‘basic pay’ w.e.f a particular date. Generally, the announcements are made in March and September of every year with retrospective effect from 1st of January and July of the same year, on the basis of average rise in the Index over last 6 months. Hence, some ‘arrear’ of DA to existing employees and DR to pensioners always remains payable, for the 2-month periods of January + February and July + August. These arrears are supposed to be disbursed along with revised DR for March and September respectively, but delays may happen.
(ii) Time to time, as an element of ‘Pay Revision’, Government merged ‘Dearness Allowance’ (DA) corresponding to a certain level of AICPI (IW). Hence, further installments of DA rates on ‘basic pay’ and DR rates on ‘basic pension’ would be a new series starting from 0% on the revised ‘basic pay’ and ‘basic pension’ respectively, and going up to higher percentages as AICPI (IW) rises. The 1st major such revision in pension was following wage revision for Central Govt. employees w.e.f. 01.01.1996
(iii) The 5th ‘Central Pay Commission’ (CPC) recommended to merge 50% of ‘Dearness Relief’ (DR) with ‘Basic Pension’ (BP) whenever DR as announced by the Govt. crosses 50% of ‘basic pension’. To implement this recommendation, Ministry of Personnel, Public Grievances and Pensions, Dept. of Pension & Pensioners Welfare issued O.M. No. 42/2/2004-P&PW (G) dated 15.03.2004, specifying that, w.e.f. 01.04.2004, out of DR of 61% on 50% of BP at that time, 50% would be classified as ‘Dearness Pension’ (DP), and balance DR would be 11% of (BP as on 31.03.04 + DP=50% of this BP). Naturally, further DR rates announced after 31.03.04 were on this combined or merged (BP + DP) as on 31.03.04.
c. Commuted Pension
Pension ‘commuted’ is the percentage of ‘basic pension’ that an employee opts to receive as a ‘lump sum’ instead of a stream of monthly pensions; this percentage is called ‘commuted pension percentage’, and the resulting absolute amount of monthly pension commuted is called ‘commuted pension’, which has to be deducted from total ‘basic pension’ to compute the actual monthly pension due to the employee. For the Armed Forces, the cap has been 45%, for Central Govt. organisations 40%, and for Public Sector Undertakings (PSUs) like nationalized banks and insurance companies, 33.33%. However, the % commuted is restored, i.e, the full value of the pension is taken as ‘basic pension’ after 15 years from date of retirement. The ‘lump sum’ total ‘commuted pension’ paid to a pensioner on retirement is therefore calculated as the present value of an ‘Annuity’ which yields 33.33% of the ‘basic pension’ for 15 years, at a ‘discount rate’ usually equal to the ‘bank rate’ (the interest rate at which banks lend to each other)
6. Major Revision by 6th CPC
The last revision of pension computation was in terms of recommendations on revision of wages of Central Govt. employees by the 6th ‘Central Pay Commission’ (CPC). This was circulated vide O.M. No. 38/37/08 dated 01.09.2008, as referred in para 2 (a) above, by Ministry of Personnel, Public Grievances and Pensions, Dept. of Pension & Pensioners Welfare, for pensioner who retired before 01.01.2006, i.e, on or before 31.12.05, and O.M. No. 38/37/08 dated 02.09.2008, for pensioner who retired after 01.01.2006, as referred in para 2 (b) above.
(i) Basically 2 formulae were laid down in O.M. dated 01.09.2008, for computing revised ‘basic pension’ (BP) of such retirees, w.e.f. 01.01.2006:
q As per para 4.1 of the O.M., the following components were to be added, i.e, ‘consolidated’ to get the new BP:
Ø BP as existing on 31.12.2005, covering all classes of pension as per paras 2a(i)&(ii) of this Article, under which BP was computed till 31.12.2005, after excluding DR equal to 50% of BP merged w.e.f. 01.04.2004 for employees who retired on or after said date, as per preceding para 2b(iii)of this Article. Let this be ‘A’
Ø DP w.e.f. 01.04.2004, or 50% of ‘A’ as mentioned above. Let this be ‘B’
Ø Revised DR on ‘All India Consumer Price Index’ for ‘Industrial Workers’ [AICPI (IW)] = 536, which worked out to 24% of (A+B).
Ø Additional ‘fixation weightage’ of 40% of ‘A’
Simple Algebra will show that this means that the new or revised BP will be 2.26A. Hence, if you retired on or prior to 31.12.2005, and know your old BP as on 31.12.2005, you simply multiply it by 2.26 to get the new revised BP w.e.f. 01.01.2006
q As per para 4.2 of the O.M., we are next to compute 50% of (minimum of the ‘pay band’ or ‘scale of pay’ + corresponding ‘grade pay’, both prior to revision of wages of Central Govt. employees w.e.f. 01.01.2006 according to 6th CPC recommendations. If this was higher than the revised consolidated BP computed as per para 4.1 of the O.M., this higher amount was to be taken as revised BP w.e.f. 01.01.2006, otherwise BP computed as per para 4.1. will apply.
q As further riders:
Ø Para 5.1 stated that if consolidated pension as per para 4.1 is found less than Rs. 3,500/- p.m., the same was to be increased to Rs. 3,500/- p.m.
Ø Para 5.2 states that in case of ‘disability pension’, if certified ‘disability’ is less than 100%, and consolidated pension has to be taken as Rs. 3,500/- p.m. as above, the actual pension would be proportionately less, even less than Rs. 3,500/- p.m. (ex: if consolidated BP worked out to Rs. 3,500/- p.m., and certified ‘disability’ was 60%, revised BP w.e.f. 01.01.2006 would be 60% of Rs. 3,500/- p.m.)
q The revised BP in terms of paras 4.1 or 4.2 would further be subject to proportionate reduction if ‘qualifying service’ period was less than 33 years, by multiplying the revised BP by the factor [(no. of completed half-months)/66]. However, this will not apply to ‘disability’pension
(ii) As per paras 5.2 and 5.3 of the O.M. dated 02.09.2008, for pensioners who retired after 01.01.2006, the revised BP w.e.f date of retirement would be ‘emolument’ for the last retiring month, or average of last 10 month’s ‘emoluments’ preceding retirement, whichever was higher, according to revised ‘pay band’ or ‘scale of pay’ w.e.f. 01.01.2006; here, the term ‘emolument’ will include the components mentioned in para 3(a)(ii) of this article, i.e, ‘Basic Pay’ including last stagnation increment, plus ‘non-practicing allowance’ of medical employees.
(iii) As already pointed out, fixed ‘medical allowance’, ‘attendance allowance’ and ‘personal pension’, wherever applicable, would be payable in addition to (i) and (ii)
6. Family Pension
If an employee dies while working after a certain minimum qualifying period of service to be eligible for pension (now 10 years) or as a pensioner, his surviving closest family member (spouse, dependent parent, dependent children, etc.), nominated by the pensioner at the time of retirement to receive the pension, will be eligible for a ‘family pension’. It is computed in a manner similar to the pension the pensioner would have received if alive, but the amount is lower, BP being 30% instead of 50% of ‘pay’ or ‘emolument’ as per steps discussed earlier, according as deceased employee retired/died before 01.01.2006, or on or after the said date:
8. The ‘New Pension Scheme’ (NPS)
Well, this about sums up the entire story of ‘pension’, as applied to Central Govt. employees recruited before 01.01.2004. What applies to recruits on or after this date is called the ‘New Pension Scheme’ (NPS), whose salient features are as follows:
A. The new ‘Contributory Pension Benefit Scheme’ replaced the earlier non-contributory ‘Pension Benefit Scheme’ as discussed till now, w.e.f. 01.01.2004; employees recruited before this date continued to be covered by the earlier Scheme. The same applies to PSUs like banks
B. The operation-cum-supervision of the entire Scheme will be regulated by a ‘Pension Fund Regulatory and Development Authority’ (PFRDA) set up by an Ordinance of the Govt.
C. The Govt. employer will deduct 10% of salary and dearness allowance of every new recruit from 01.01.2004, and make a matching or equal contribution. This was the procedure for ‘Contributory Provident Fund’ (CPF) accumulation to be paid on retirement, with ‘pension’ being an additional burden to be borne solely by the employer. But w.e.f 01.01.2004, CPF has been withdrawn, and ‘contributory’ pension has taken its place.
D. The total contribution as per (B) will be invested in a suitable mix of BSE or NSE Index Scheme, Govt. bonds and ‘Mutual Fund’ or other ‘monthly income schemes’; the allocation between these schemes may be 0 – 100%, a maximum of 50% of the fund can be invested in Index Equity Schemes
E. The following ‘Pension Fund Managers’ (PFMs) have been chosen by PFRDA through a bidding process, and authorized to manage the investment of pension funds according to allocation as per (C) above:
Ø ICICI Prudential Pension Funds Management Company Limited
Ø IDFC Pension Fund Management Company Limited
Ø Kotak Mahindra Pension Fund Limited
Ø Reliance Capital Pension Fund Limited
Ø SBI Pension Funds Private Limited
Ø UTI Retirement Solutions Limited
F. Each employee has to fill up an ‘NPS Subscriber Application Form’ to indicate his choice of any of the PFMs and allocation of contributed fund as per (C)
G. The employee will be assigned a unique ‘Permanent Retirement Account No.’ (PRAN) by ‘National Securities Depository Limited’ (NSDL), chosen by PFRDA as the ‘Central Recordkeeping Agency’ (CRA) which is to maintain the entire database of all subscribers to the NPS, including non-Govt. employees, even ordinary citizens who can enter NPS through certain stipulated minimum contributions per year. By using this ‘PRAN’, NPS subscribers can access relevant data on the CRS’s website (http://www.npscra.nsdl.co.in), like performance of various PFMs and Schemes (ex: movement of ‘net asset values’ of various schemes of each PFM). Through this website, a subscriber can smoothly change his choice of PFM and/or allocation of pension fund between Schemes at any time
H. Under introductory 1st phase or ‘Tier-I’ of NPS, a Central Govt. employee subscriber can exit the NPS on retirement the age of 60 years, till which time no withdrawals can be made from the fund. On exit, at least 40% of the wealth accumulated through investment of the funds in terms of (B) and (C) must be used to purchase an ‘Annuity’ (similar to a bond which pays a certain fixed amount at equal intervals of, say, 1 month) from a Life Insurance Co. in India, to get the desired stream of monthly pension income over his lifetime. The employee subscriber will get the balance of the fund from his employing Dept./organization as a ‘lump sum’ on retirement, to be utilized as he chooses.
I. The subscriber can also exit from NPS before 60 years. But then he has to utilize at least 80% of the wealth accumulated through investment of the pension fund to purchase Annuity, instead of 40%
J. Under a ‘Tier-II’ Scheme launched later, a subscriber can make voluntary contributions to NPS over and above the ‘Tier-I’ contributions. These can be withdrawn at any time and utilized in any manner, after investment meanwhile as per (B) and (C).
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