The Ministry of Finance on Thursday arrange a committee to evaluate the pension system for authorities employees.
The committee would recommend whether or not within the gentle of the prevailing framework and construction of the National Pension System (NPS), as relevant to authorities employees, any modifications therein are warranted.
As per its phrases of reference, the committee would recommend measures to switch the identical with a view to bettering upon the pensionary advantages of presidency employees lined beneath the NPS, conserving in view the fiscal implications and influence on general budgetary house, in order that fiscal prudence is maintained to guard the frequent residents.
The committee, to be chaired by Somanathan, would have Secretary within the Department of Personnel and Training (DoPT), Special Secretary within the Department of Expenditure and Chairman of Pension Fund Regulatory and Development Authority (PFRDA) as members.
Last month, Finance Minister Nirmala Sitharaman mentioned {that a} Finance Secretary-chaired Committee would look into the difficulty of pensions beneath the NPS for authorities employees and evolve an method which addresses the wants of employees whereas sustaining fiscal prudence.
The announcement got here within the backdrop of a number of non-BJP states deciding to revert to the DA-linked Old Pension Scheme (OPS) and in addition worker organisations in another states elevating demand for the identical.
The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have knowledgeable the Centre about their determination to revert to the outdated pension scheme and have requested a refund of the corpus gathered beneath the NPS.
Last month, Finance Ministry knowledgeable Parliament that it’s not contemplating any proposal to revive the OPS in respect of the central authorities employees recruited after January 1, 2004.
Under the OPS, retired authorities employees acquired 50 per cent of their final drawn wage as month-to-month pensions. The quantity retains rising with the hike within the DA charges. OPS just isn’t fiscally sustainable as it’s not contributory and the burden on the exchequer retains on mounting.
NPS has been carried out for all authorities employees besides these within the armed forces becoming a member of the central authorities on or after January 1, 2004. Most of the state/ Union Territory governments have additionally notified the NPS of their new employees.
According to the PFRDA (Pension Fund Regulatory and Development Authority), 26 state governments, except Tamil Nadu and West Bengal, have notified and carried out NPS for their employees.
The workplace memorandum issued by the ministry relating to establishing of the committee doesn’t present a timeline for finalising the report.
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