Newsletter June 2012 - Association of Engineers Kerala
Newsletter June 2012 - Association of Engineers Kerala
Newsletter June 2012 - Association of Engineers Kerala
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<strong>Association</strong> <strong>Association</strong> <strong>of</strong> <strong>of</strong> <strong>Engineers</strong> <strong>Engineers</strong> <strong>Kerala</strong><br />
<strong>Kerala</strong><br />
within the prescribed period or if the appellant is not<br />
satisfied with the order <strong>of</strong> the Appellate Authority, he may<br />
prefer a second appeal with the Information Commission.<br />
Where the Information Commission at the time <strong>of</strong><br />
deciding the complaint or appeal is <strong>of</strong> the opinion that<br />
the Public Information Officer has without any reasonable<br />
cause, refused to receive an application for information<br />
or not furnished information within the time specified,<br />
or malafidely denied the request for information or<br />
Thought Thought <strong>of</strong> <strong>of</strong> the the day<br />
day<br />
The most discussed topic, now a days, among the<br />
Service personnel is the PFRDA bill (The Pension Fund<br />
Regulatory and Development Authority Bill, 2011). Let<br />
us have brief note on how the New Pension Scheme (NPS<br />
) as envisaged in PFRDA bill differ from present General<br />
pension Scheme. Our present pension scheme is a Defined<br />
Benefit Scheme( DB system). The pension amount is<br />
linked to the pay drawn, number <strong>of</strong> years <strong>of</strong> service etc.,<br />
and there is no direct contribution <strong>of</strong> the employee or<br />
employer towards a pension fund. Here the entire<br />
investment risk is borne by the pension fund manager<br />
which is the government.<br />
Traditionally, a large proportion <strong>of</strong> pension funds<br />
around the world have been <strong>of</strong> the DB type. However,<br />
many have been under funded, and some have collapsed<br />
6<br />
knowingly given incorrect, incomplete or misleading<br />
information or destroyed information, it shall impose<br />
penalty <strong>of</strong> Rs. 250/- each day till information is furnished<br />
subject to the condition that the total amount <strong>of</strong> penalty<br />
shall not exceed Rs. 25,000/-<br />
The ultimate aim <strong>of</strong> Right to Information Act is to<br />
have well informed citizenry, which is aware <strong>of</strong> its rights,<br />
and well trained <strong>of</strong>ficers <strong>of</strong> Public Authorities who are<br />
aware <strong>of</strong> therir duties and functions under the Act.<br />
Present Pension Scheme vs New Pension Scheme ( PFRDA Bill)<br />
Er S. Vinod Mohan, (Editor)<br />
Defined Benefits versus Defined Contribution<br />
due to lack <strong>of</strong> proper financial planning. This has led to a<br />
debate in a number <strong>of</strong> countries regarding the<br />
sustainability <strong>of</strong> their pension and social security systems.<br />
The New Pension Scheme as envisaged in PFRDA bill is a<br />
Defined Contribution System (DC system ). Here each<br />
employee contributes a proportion <strong>of</strong> his monthly income<br />
to an individual account. The funds in this account are<br />
invested in one or more schemes <strong>of</strong>fered by pension fund(s).<br />
The balance in the account belongs to the employee, which<br />
will be accessible at the time <strong>of</strong> exit. The employee bears<br />
the entire investment risk and there is no risk <strong>of</strong> default by<br />
the fund as the liability <strong>of</strong> the fund to its subscriber equals<br />
the assets owned. Here lists some advantages and<br />
disadvantages <strong>of</strong> the DB and DC system.<br />
Defined Benefits Defined Contributions<br />
Guaranteed retirement income Participants have more choice in investing<br />
Employees do not bear investment risk Participants can benefit from better returns<br />
Advantages Flexibility for inflation and wage<br />
adjustments<br />
Plans are easily portable across job changes<br />
Independent <strong>of</strong> participant’s savings Option to switch fund managers and schemes<br />
No risk <strong>of</strong> default by fund managers<br />
Not beneficial to employees who leave<br />
before minimum eligible service<br />
Returns are subject to market performance<br />
Less portable in switching employers Participants bear investment risk and may make<br />
Disadvantages misinformed choices<br />
Fund manager could default if funds are<br />
not invested appropriately<br />
Difficult to build a fund for those who enter late<br />
Shifts administration costs to employees<br />
Source PRS