No. 1(7)(2003/TA/Part file/ 279
Ministry of Finance
Department of Expenditure
Office of Controller General of Accounts
Lok Nayak Bhavan, Khan Market
New Delhi-110 003
Sub: - Implementation of the Defined Contribution Pension Scheme (DCPS)
-Streamlining of procedure for remittance of contributions to Trustee
bank by PAOs/ CDDOs-reg
Government of India had introduced a new Defined Contribution Pension
Scheme(DCPS) with effect from 01.01.2004 vide Government of India, Ministry
of Finance, Department of Economic Affairs Notification, dated 22-12-2003. It is
applicable to all new entrants joining Government service (except Armed Forces)
on or after 1-1-2004.
The salient features of the New Pension Scheme as per the notification
dated 22-12-2003 are as follows:-
The New Pension Scheme works on defined contribution basis and it has
two tiers-Tiers-I and II. Contribution to Tier-I is mandatory for all Government
servants joining Government service on or after 1-1-2004, whereas Tier-II will
be optional and at the discretion of Government servants. Under Tier-I,
Government servants will have to make a contribution of 10% of his basic pay
plus DA, which will be deducted from his salary bill every month by the DDO
concerned. The Government will make an equal matching contribution. Tier-I
contributions (and the investment returns) will be kept in a non-withdrawable
Pension Tier-I Account. Tier-II contributions will be kept in a separate account
that will be available for withdrawal at the option of the Government servant.
Government will not make any contribution to Tier-II account.
provisions of Defined Benefit Pension and GPF would not be available to new
Government servants joining Government service on or after 1-1-2004.
Since a regular Central Record Keeping Agency and Fund managers had
not been appointed then, as an interim arrangement, the contributions made by
Government employees as also the matching contributio