The Union Finance Ministry recently reiterated the legal position in the Rajya Sabha, i.e., the absence of any provision to allow the Consolidated Fund of Members National Pension System (NPS) For states to “withdraw and deposit back”, there should be a deterrent effect on states that are considering withdrawal. Old Pension Scheme (OPS), The ministry’s stand reflects what the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015 and other regulations say. The Center has also been making it clear for the right reasons that it is not considering any proposal to restore the OPS. As experts and the Reserve Bank of India (RBI) point out, the annual savings in fiscal resources that result from repatriation to OPS are short-lived. The potential financial gain would later be replaced by a huge liability in the form of pension payments. Former RBI governor D. Subbarao also called the idea “regressive”, with more privileges for government employees than the public, many of whom have no social safety net.
However, the issue refuses to die, as government employees or those in government-controlled enterprises continue to fight for it. Be it Maharashtra, Uttar Pradesh or Karnataka, the employees have struck work demanding resumption of OPS. But their concern about the uncertainty about the amount of pension under NPS is justified as they aspire for a quality retired life. NPS, despite being PFRDA regulated, is a market-linked and defined contribution product, while OPS is a defined benefit pension scheme, where beneficiaries generally get 50% of their final salary, and the entire cost is borne by the government. Is. Therefore, rejecting the demand of OPS outright will only worsen the situation. It is time the Center prepares a scheme that combines features of the old and the new. While maintaining the element of employee contribution, the scheme may have a higher contribution by the government, which should step in even if it does not ensure the prescribed minimum pension amount. A proposal from Andhra Pradesh last year is worth noting. Considering the contributory nature of NPS, the proposal guarantees 33% of basic pay. If necessary, it can be modified to suit the needs of other states as well. Better healthcare facilities can be considered which include a generous insurance plan. On their part, employees should be both pragmatic and willing to problem solve.
Click here to read this editorial in Telugu.
Click here to read this editorial in Malayalam.
Click here to read this editorial in Tamil.