Social Security Current Affairs
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Union Cabinet has decided to raise contribution of Central Government to National Pension System (NPS) corpus of its employees from 10% to 14%. This will increase in eventual accumulated corpus of all central government employees covered by NPS. There are 18 lakh central government employees at present. The revenue impact from higher government contribution to employees’ corpus is expected to be around Rs.2,840 crore for 2019-20 and will be in nature of a recurring expenditure.
Government also has decided to make NPS fully tax free, making it on par with the provident fund scheme. It has decided to exempt income tax that is applicable on part of NPS corpus that is withdrawn on retirement. At present, while exiting scheme, 60% of corpus could be withdrawn and 20% of withdrawn amount is taxable. This portion now has been made tax free. The remaining part that could be used to buy annuities is anyway tax free. With this decision, NPS has acquired parity with provident fund savings, which are not taxed at any of three stages of saving, profit accrual or exit.
National Pension System (NPS)
It is easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. It was launched in 2004 and was initially introduced for new Government recruits (except armed forces). It aims to institute pension reforms in country and to inculcate habit of saving for retirement amongst the citizens. Its objective is to provide retirement income to all the citizens. Under it, individual contributes to his retirement account. Employer can also co-contribute for social security/welfare of individual. It was extended for all citizens of country from May 2009 including the unorganised sector workers on voluntary basis. NPS is governed and administered by Pension Fund Regulatory and Development Authority (PFRDA). Currently, any Indian between age of 18 to 65 years may voluntarily join the NPS. NRI can open an NPS account, however contributions made by NRI are subject to regulatory requirements as prescribed by RBI and FEMA from time to time.
Employees’ State Insurance Corporation (ESIC) was awarded ISSA (International Social Security Association) ISSA Good Practice Award for Administrative Solution for Coverage Extension at Regional Social Security Forum for Asia and Pacific held at Kuala Lumpur, capital Malaysia.
The award was given to ESIC in recognition of its measures taken for extension of coverage Scheme for Promoting Registration of Employers and Employees (SPREE), reduced rate of contribution rates for 24 months in newly implemented areas and raising wage limit for coverage under ESI Act, etc.
Regional Social Security Forum for Asia and the Pacific is triennial (held every three year) forum that provides unique opportunities to CEOs and Managers of ISSA Member Institutions to discuss key social security challenges and share their experiences. It is most important social security event in Asia-Pacific region. For this forum, ISSA invites submissions for ISSA Good Practices Award for Asia and Pacific Regions.
International Social Security Association (ISSA)
It is principal international organization for Social Security Organizations, Governments and Departments of Social Security. It was founded in 1927 under auspices of International Labour Organization (ILO). It has its headquarters in Geneva, Switzerland in ILO. Its mandate is to promotes excellence in social security administration through professional guidelines, expert knowledge, services and support to enable its Members to develop dynamic social security systems. ISSA has more than 330 member organizations in 158 countries.
Employees’ State Insurance Corporation (ESIC)
ESIC is autonomous corporation under Union Ministry of Labour and Employment, which manages employee’s state insurance i.e. self-financing social security and health insurance scheme for Indian workers. It is statutory body established under Employees State Insurance Act, 1948. It is headquartered in New Delhi. ESIC hosts ISSA Liaison Office for South Asia in New Delhi. This liasion office coordinates with member countries and social security institutions in Bhutan, Bangladesh, Sri Lanka, Nepal and Iran on activities of ISSA related to social security.