Street Food: Why govt employees hate NPS | Business Standard News

Street Food: Why govt employees hate NPS | Business Standard News


24, 2015
(NO) Pension System
This refers to N Sundaresha Subramanian’s article “Why govt employees
hate the NPS” (Street Food, November 24). Thanks for revealing the shabby
treatment given to NPS, since inception, including exclusion of the subject
from the TORs of two successive Central Pay Commissions. Mainstream media too, both
print and electronic, as they have reasons to hate ‘babus’, have been blacking out the injustice meted out to
government and public sector employees who joined service from January 1, 2004.
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
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 gone
deep into the genesis and implementation of NPS, listed several concerns and
made recommendations including one for upward revision of employer’s
contribution. The following excerpt from Chapter 10.3 of the CPC report will
give an idea as to how deep the NPS 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 be taken for establishment of
an Ombudsman f or redressing individual grievances relating to NPS.”

M G Warrier, Mumbai


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