PROCEEDINGS OF GOVERNMENT OF KARNATAKA

Subject: Implementation of Defined Contribution Pension Scheme (New
Pension Scheme) w.e.f. 01.04.2006 for new entrants to Government
Service- reg.
Read: 1) G.O. No. FD (SPL) 04 PET 2005, Bangalore, Dated
31st March 2006.
2) G.O. No. FD 79 TAR 2006, Bangalore, Dated 16th June 2006.
PREAMBLE:
The State Government has approved a Defined Contribution Pension Scheme
as a mandatory scheme for all new recruits to the State Government service
joining on or after 1-4-2006. There are around 60,000 such employees as on
date. The monthly contribution under the scheme shall be 10 percent of Basic
Pay and Dearness Allowance thereon to be paid by the employee and
matched by the State Government in equal proportion. The contributions and
returns are to be deposited in a non-withdrawable Pension Tier-I Account.
The Government of India has also implemented a Defined Contribution
Pension Scheme, known as New Pension Scheme (NPS), with effect from 1-1-
2004. Several State Governments have implemented similar scheme from
subsequent dates. The scheme is being implemented as per an architecture
made and regulated by Pension Fund Regulatory and Development
Authority (PFRDA). The supervision of the scheme functioning and
performance of all intermediaries is done by a NPS Trust under overall
guidance and supervision of PFRDA.
In the Government Order referred at (1) above, it was indicated that separate
orders will be issued appointing the Central record Keeping agency and
Pension Fund Managers for implementing the Defined Contribution Pension
Scheme. The Government of Karnataka has considered the NPS architecture,
as detailed in Annexure I, set up by PFRDA, and has decided to adopt it for
implementing the scheme.
Hence the following order.
GOVERNMENT ORDER NO. FD (SPL) 28 PEN 2009 Bangalore
Dated 19.1.2010
1. The Government of Karnataka shall avail the services of NPS
architecture set up by PFRDA.
2. The Government of Karnataka shall enter into an agreement with the
NPS Trust to be governed in Toto by the NPS Pension Architecture and
other regulatory parameters, directions, regulations, guidelines, etc.
issued from time to time.
3. The Government of Karnataka shall also enter into a separate
agreement with the National Securities Depository Ltd (NSDL) as the
Central Record Keeping Agency (CRA) as appointed by PFRDA. The
role of the CRA and fee payable for its services are detailed in
Annexure II. The fee to the CRA shall be paid by the State Government.
A separate notification under section 4(g) of the Karnataka
Transparency in Public Procurement Act for engaging services of the
NSDL has been issued.
4. The charges of the Pension Fund Managers (PFMs), Trustee Bank and
Custodian shall be borne by the employees through appropriate
deductions from the investments done by the PFMs.
5. The State Government shall allocate the pension corpus of the New
Pension Scheme between the three Pension Fund Managers in the same
proportion as has been fixed for the Government of India employees
till further orders.
6. The Director of Treasuries shall be the State Nodal Officer for
implementing the scheme.
7. Separate Orders will be issued in respect of operational, accounting
and audit procedures of the scheme.
By order and in the name of
Governor of Karnataka
(U.P.Prabhu)
Special Officer and Ex-officio
Deputy Secretary to Government
Finance Department (Pensions)
Copy to:
1. The Chief Secretary to Government, Vidhana Soudha, Bangalore
2. The Accountant General (A&E) / Principal Accountant General
(Audit-1), Bangalore
3. The Additional Chief Secretary to Government, Vidhana Soudha,
Bangalore