Only online withdrawals for NPS from April 2016: PFRDA - Moneylife

Only online withdrawals for NPS from April 2016: PFRDA - Moneylife

My VIEW:

 New Pension Scheme (later rechristened as National Pension System was introduced in December 2003, prospectively for central government employees (except those in defence services) joining service from January 1, 2004. For those affected, it was ‘substitution of existing defined benefit pension scheme by something very similar to contributory provident fund with no guaranteed return’.
There is no evidence to show that the shift was after any study about the social security aspect inherent in a pension scheme. The primary ground for denial of pension benefits for ‘future’ employees was the unfunded pension liability of central government which exceeded three lakh crore of rupees in 2003. The ‘Pay As You Go’ method of meeting pension liability was being adversely commented. GOI refused to look at the suggestion to start funding pension liabilities. NPS was consciously excluded from the terms of reference of VI Pay Commission.
In 2006-07, ING Group and Indian Institute of Management, Bangalore undertook a joint research on pension systems in India at the instance of ING Global Retirement Services. The findings are available in the form of a 588 page book “Facing the Future: Indian Pension Systems”(By David J. W. Hatton, Naren N. Joshi, Fang Li, R. Vaidyanathan, S. Jyothilakshmi, Shubhabrata Das and Sankarshan Basu. Publisher: Tata McGraw Hill Rs625). This well-researched document did not find any takers in PFRDA or the concerned ministries in GOI. 
The VII Pay Commission has examined the implementation of NPS and listed several deficiencies. Chapter 10.3 deals with NPS. The following excerpt from the report will give an idea, how deep the mess is:
"The Commission notes that no department of Government of India is taking ownership of the NPS. The Commission recommends that a Committee consisting of Secretary, Department of Financial Services, Secretary, Department of Pensions and Pensioners Welfare and Secretary, Department of Administrative Reforms and Public Grievances may be constituted to review the progress of implementation of NPS. The Commission also recommends that steps should b e taken for establishment of an Ombudsman f or redressing individual grievances relating to NPS."
M G Warrier

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