Friday, January 28, 2011

Delay in implementation of NPS costs each employee Nine to Twenty Five Lakh rupees

The employees who joined prior to 2008 are entirely clueless about their social security and their old age is destined to be spent in unending woes. We are spineless and we deserve so. Employees who joined after 2008 are at least hopeful of making the retirement years comfortable with the retirement fund that could be created with proper investment planning. Please refer my previous posts here and here to know how one can ensure better social security with NPS.

But the unexplainable delay in implementation of NPS in samiti causes huge losses for post 2008 appointees. Samiti took around 8 months to bring out a notification after the approval of cabinet for NPS in NVS. Even after two years of cabinet approval, NPS is yet to be rolled out. Average contribution of an employee is 2000 per month with the same matching grant of NVS which amounts to 48,000 per year. Weighted average return of NPS so far stands at 12.3756 % per year. The loss for an employee for last one year amounts to Rs5000/-.  The corpus so far accumulated would have been around 53000.

The loss in terms of corpus at the retirement, for each employee it would be around 9 lakhs. If we start with the initial investment of 50,000 with 40,000 getting added each year with the 12% CAGR the retirement corpus after 25 years would be 75,94,829. The same investment without the initial fifty thousand would fetch only  66,44,826. The notional loss for each employee is around nine lakhs. For those who are 30 and 35 years away from their retirement, the loss would be 20-25 lakhs!!



Saturday, January 15, 2011

No Clarity on JNVST 2011

It was hoped in my previous post  NO JNVST 2011 that NVS would be able to sort out the complications arising out of Right to Education Act  and JNVST 2011 would be conducted in time. But all such hopes seem to be misplaced.  JNVST 2011 is hardly a month away and still there is no solution in sight.
As per the news paper reports, it is yet to be decided by HRD ministry,whether a notification is enough or an amendment is required. We can't say how and where the idea of notification originated, but it seems to have derailed the whole process of finding a proper solution. We can't understand why Ministry of HRD is shying away from pushing for an amendment.Ministry of HRD seems to be illogically  vary of encouragement  such amendment would provide for  lobbying from vested interests in secondary education for further amendments and it may open a Pandora box. No body can dispute the special nature of Navodayas and Sainik Schools. The decision must be legislative so that the sanctity of JNVST could never be challenged. The amendment would also resolve the dilemma of  state government run welfare school organizations.Hope there would be an amendment for RTE in this budget session paving way for smooth conduct of JNVST.