NPS: Finance Ministry Gives Nod To Employer’s Contribution Of 14% For CAB Employees

The Ministry of Finance has now approved the contribution of 14% employer's share to NPS account of CAB or Central Automonous Bodies' employees. Vide a notification dated 31st January 2019, the centre had enhanced the employer's share of contribution for centre's NPS subscribers from 10% to 14%. Nonetheless, as CAB employees are not central government employees, 14% employer's share ruling did not become applicable for them automatically.

CABs are dependent financially on grant-in-aid from the centre. Now any such increase in the employer's contribution would result in budgetary implication and that needs approval from the centre. There was noticed that without prior approval from the finance ministry, the employer's contribution was increased to 14% of pay and DA in respect of a number of CABs.

The Government was informed that "such internal and suo-moto decisions by the CABs/ Administrative Ministries are contrary to the Delegation of Financial Powers and tantamount to unauthorized expenditure."

"The issue has further been examined by this Department and taking into consideration all the factors, it has been decided that the notification dated 31.01.2019 may be extended to the employees of Central Autonomous Bodies," Department of Expenditure, Ministry of Finance said in an Office Memorandum dated 26th August 2021.

"The date of effect will be same as applicable in case of Central Government employees i.e. 01.04.2019. The administrative Ministry/ Departments are directed to ensure that while implementing the enhanced share of contribution among the autonomous bodies, the financial implications shall be borne by the Government in the same manner, as was decided to be borne while implementing the pay revision benefits to employees of autonomous bodies in terms of the 7th CPC recommendation as enumerated vide this Department's order," the Office Memorandum further said.

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