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Consider the following statements.
- Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners.
- National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary.
- NPS is mandatory for central government employees joining services on or after January 1, 2004.
How many of the above statements are correct?
- a)Only one
- b)Only two
- c)All three
- d)None
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements. Under old pension scheme (OPS), the...
- Statement 2 is incorrect.
- An old pension scheme (OPS), commonly known as the PAYG scheme, is defined as an unfunded pension scheme where current revenues fund pension benefits. Under this scheme, the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. OPS involved a direct transfer of resources from the current generation of taxpayers to fund the pensioners.
- NPS is a defined contribution pension scheme. NPS enables an individual to undertake retirement planning while in employment. With systematic savings and investments,
- NPS facilitates the accumulation of a pension corpus during their working life. NPS is designed to deliver a sustainable solution of having adequate retirement income in old age or upon superannuation.
- The current National Pension Scheme requires employees to contribute 10% of their basic salary and the government 14%. The eventual payout depends on the market returns on that corpus, which is mostly invested in federal debt.
- In contrast, the Old Pension Scheme (OPS) guarantees a fixed pension of 50% of an employee’s last drawn salary, without requiring them to contribute anything during their working life.
- NPS is mandatory for central government employees joining services on or after January 1, 2004, and almost all state governments have adopted it for their employees. NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
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Consider the following statements. Under old pension scheme (OPS), the...
Explanation:
The correct answer is option 'B', only two of the statements are correct. Let's analyze each statement one by one:
Statement 1: Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners.
This statement is correct. Under the old pension scheme, the contributions made by the current generation of workers were explicitly used to pay the pensions of existing pensioners. In this scheme, there is no individual account for each employee, and the pension is paid from a common pool funded by the contributions of the current employees.
Statement 2: National Pension Scheme (NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary.
This statement is correct. The National Pension Scheme (NPS) is a contributory pension scheme in which employees contribute a certain percentage of their salary towards their pension. The employees contribute 14% of their salary, which is deducted from their monthly salary and deposited into their individual NPS account.
Statement 3: NPS is mandatory for central government employees joining services on or after January 1, 2004.
This statement is incorrect. NPS is not mandatory for all central government employees. It is only mandatory for central government employees joining services on or after January 1, 2004. Central government employees who joined before this date have the option to choose between the old pension scheme and the NPS.
Therefore, only two of the above statements are correct.
The correct answer is option 'B', only two of the statements are correct. Let's analyze each statement one by one:
Statement 1: Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners.
This statement is correct. Under the old pension scheme, the contributions made by the current generation of workers were explicitly used to pay the pensions of existing pensioners. In this scheme, there is no individual account for each employee, and the pension is paid from a common pool funded by the contributions of the current employees.
Statement 2: National Pension Scheme (NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary.
This statement is correct. The National Pension Scheme (NPS) is a contributory pension scheme in which employees contribute a certain percentage of their salary towards their pension. The employees contribute 14% of their salary, which is deducted from their monthly salary and deposited into their individual NPS account.
Statement 3: NPS is mandatory for central government employees joining services on or after January 1, 2004.
This statement is incorrect. NPS is not mandatory for all central government employees. It is only mandatory for central government employees joining services on or after January 1, 2004. Central government employees who joined before this date have the option to choose between the old pension scheme and the NPS.
Therefore, only two of the above statements are correct.
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Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?
Question Description
Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. Under old pension scheme (OPS), the contribution of the current generation of workers was explicitly used to pay the pensions of existing pensioners. National Pension Scheme(NPS) is a contributory pension scheme under which employees contribute 14 per cent of their salary. NPS is mandatory for central government employees joining services on or after January 1, 2004.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
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