Senior Citizens Guide 23-07-09.pmd - Helpage India Programme

19the Provident Fund are stopped three months prior to the date ofsuperannuation.rates of subscription shall not be less than 6% of subscriber’semoluments. Rate of interest on GPF accumulations with effect from 1.4.2000 is11% compounded annually and the rate of interest will vary according to thenotifications of the government.the rules provide for drawal of advances/withdrawals from the Fund for specific purposes.Deposit Linked Insurance Revised SchemeUnder the GPF Rules, on the death of subscriber, the person entitled to receivethe amount standing to the credit of the subscriber shall be paid an additionalamount equal to the average balance in the account during the 3 years immediatelypreceding the death of the subscriber subject to certain conditions provided in therelevant Rule. The additional amount payable under that Rule shall not exceedRs. 60,000/-. To get this benefit, the subscriber should have put in at least 5 yearsservice at the time of his/her death.(Ministry of Personnel, Public Grievances & Pensions, Department of Pension &Pensioners Welfare, New Delhi)(v) New Pension Scheme in India• The new pension system would be based on defined contributions. It willuse the existing network of bank branches and post offices etc. to collectcontributions. There will be seamless transfer of accumulations in case ofchange of employment and/or location. It will also offer a basket ofinvestment choices and Fund managers. The new pension system will bevoluntary.• The system would, however, be mandatory for new recruits to the CentralGovernment service (except the armed forces). The monthly contributionwould be 10 percent of the salary and DA to be paid by the employee andmatched by the Central Government. However, there will be no contributionfrom the Government in respect of individuals who are not Governmentemployees. The contributions and returns thereon would be deposited in anon-withdrawable pension account. The existing provisions of definedbenefit pension and GPF would not be available to the new recruits in thecentral Government service.• In addition to the above pension account, each individual can have avoluntary tier-II withdrawable account at his option. Government will makeno contribution into this account. These assets would be managed in thesame manner as the pension. The accumulations in this account can bewithdrawn anytime without assigning any reason.• Individuals can normally exit at or after age 60 years from the pensionsystem. At exit, the individual would be required to invest at least 40 percentof pension wealth to purchase an annuity. In case of Governmentemployees, the annuity should provide for pension for the lifetime of the