The Punjab cabinet on Monday decided to hike its share in the National Pension Scheme from 10 per cent of basic pay and dearness allowance to 14 per cent, in line with a move by the Centre some months back.
The four percentage point-hike in the government's contribution comes after demands by workers' unions and will cost the state an additional Rs 258 crore every year.
It will come into effect from April 1, 2019, a government statement said.
Earlier, the state government was required to match the minimum 10 per cent contribution made by its employees who are part of the scheme.
The state government has 3,53,074 employees. Of them 1,52,646 are covered under the new National Pension Scheme (NPS).
This decision is in consonance with the notification issued by the Union finance ministry on January 31, a Punjab government press statement said.
The government has also agreed to give the benefit of death-cum-retirement gratuity to all state government employees recruited on or after January 1, 2004 and covered under the national pension scheme, it said.
Dependents of employees recruited after this date will also get ex-gratia benefits given under the earlier pension scheme.
The annual expenditure on account of the 10 per cent contribution by the state government for employees covered under the NPS was Rs 585 crore in the 2018-19 financial year. This year, it was set to increase to Rs 645 crore.
Increasing the share to 14 per cent will mean an additional Rs 285 crore this year, the government said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)