Pension Plans in India

Traditionally all employees in Government sector in India were covered under “Defined benefit Pension” (DBP) plan. Under this plan, the Employer subscribes to a pension plan and contributes funds so that the employees on retirement get a defined amount till he or she survives. Every year the pension benefits of the future that have to be paid from this plan are calculated and the amount that needs to be contributed to the policy to fund the projected pension amount. It is a secured pension plan for an employee as he or she can calculate beforehand the eligible amount based on …