GOVERNMENT SCHEMES IN INDIA: A CASE STUDY OF NATIONAL PENSION SYSTEM
Abstract
The Government of India has introduced National Pension System (NPS) initially only to the Central Government employees joining the service on or after January 1, 2004. Later on, the scheme has been adopted by the State Governments as well. To reduce its fiscal burden, the Government has introduced NPS in place of Defined Benefit Scheme (DBS) which was offered to the government employees. However, after May 2009, NPS has rolled out pension schemes even for non-Government employees also. NPS is a defined contribution retirement savings scheme wherein both the employer and employee contribute to NPS based on the guidelines laid down by Pension Fund Regulatory Development Authority of India (PFRDA). The purpose of the scheme is to ensure an adequate income for the post-retirement life of an individual. Therefore, the present study concentrates on evaluating the performance of Pension Schemes under NPS for Government Employees. At present, NPS offers 2 pension schemes namely CG for Central Govt. employees and SG for State Govt. employees and other 10 pension schemes for non-government employees (corporate employees, self-employed, and individuals working in the unorganized sector). The study is both descriptive and empirical in nature. Secondary data on returns of each scheme is collected from the annual reports of NPS Trust. Primary data has been collected by administering a structured questionnaire to the Government employees of NPS. Purposive sampling method is adopted to select the respondents. The performance of each Pension Scheme is evaluated through the risk-return analysis and also with the performance evaluation models like Sharpe, Treynor and Jensen ratios. Descriptive statistical techniques like Geometric mean, Standard deviation, and Coefficient of Variation have been applied. Factor analysis is employed to analyse the perceptions of Govt. employees. The results help in identifying the scheme that has better and consistent returns along with the best Pension fund for each scheme.
Keyword : NPS, DBS, PFRDA, CG, and SG
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