NEW CONTRIBUTORY PENSION SYSTEM (NPS)
M.krishnan
Secretary General
Confederation of Central Govt.
Employees & Workers
Pension scheme was inwards style inwards Bharat for a century or to a greater extent than in addition to the British Government during the pre-independence era introduced Pension Rules for Government employees in addition to thus made it statutory. In the twelvemonth 1982 Supreme Court inwards its landmark sentence inwards Nakara’s illustration declared that - “as per India’s constitution, Government is obliged to supply social in addition to economical safety to pensioners in addition to that Government retirees had the key right to pension..... Pension is non a bounty nor a affair of grace depending upon the sweetness volition of the employer. It is non an ex-gratia payment, but a payment for past times service rendered. It is a social welfare measure, rendering socio-economic justice to those who inwards the hi days of their life, ceaselessly toiled for their employers on the assurance that inwards their sometime age, they would non live left inwards lurch.”
During the advent of globalisation policies inwards 1980’s the pension reforms also started simultaneously. International Monetary Fund & World Bank started publishing so many reports in addition to documents emphasizing the take away for pension reforms. They also started studying virtually the reforms to live undertaken inwards the pension sector inwards India. In 2001, “IMF piece of occupation newspaper on pension reforms inwards India” in addition to World Bank Bharat specific report“India - the challenge of sometime historic menses income security” were published. Their piece of occupation reports emphasized that “Pension obligations or promises made past times the Governments which get got potential of exerting pressure level on Govt. finances, get got been a dependent area of increased focus inwards assessing medium to long term financial sustainability.” In melody amongst the dictates of International Monetary Fund in addition to World Bank BJP-led NDA Government appointed Bhattacharjee Committee inwards 2001 headed past times Ex-Chief Secretary of Karnataka, to study in addition to recommend pension reforms. Thus afterward creating basis for pension reforms, nether the pretext of implementing recommendations of Bhattacharyya Committee, the NDA Government introduced New Pension System called Defined Contributory pension scheme for all employees who bring together service on or afterward 01-01-2004. The Congress-led UPA Government which came to might inwards 2004 continued amongst the reforms in addition to promulgated an ordinance to legalise NPS. But UPA-I Govt. could non top the Pension Bill inwards Parliament due to rigid opposition of Left Parties supporting it. Later when UPA-II Government came to might the Pension Regulatory in addition to Development Authority (PFRDA) Bill was passed inwards the Parliament amongst the back upwards of BJP, the in addition to so opposition party. Many State Governments governed past times political parties other than Left Parties, introduced Contributory Pension System for their employees from diverse dates afterward 2004. Left Front Governments of Kerala, West Bengal in addition to Tripura refused to innovate the New Pension Scheme in addition to they continued amongst the sometime defined produce goodness pension scheme. Congress-led UDF Government introduced NPS inwards Kerala. After BJP coming to might inwards Tripura also Contributory Pension Scheme is introduced recently. In West Bengal sometime Pension Scheme continues fifty-fifty now. Not only newly appointed Central in addition to State Government employees, almost all novel entrants of populace sector in addition to Autonomous bodies are also brought nether the purview of NPS.
As per New Contributory Pension Scheme an sum of 10% of pay summation Dearness Allowance volition live deducted each calendar month from the salary of the employees covered nether NPS in addition to credited to their pension account. Equal sum is to live credited past times the Government (employer) also. Total sum volition become to the Pension Funds constituted nether the PFRDA Act. From the pension fund the sum volition become to the portion market. As per the PFRDA Act - “there shall non live whatever implicit or explicit assurance of produce goodness except (share) marketplace based guarantee machinery to live purchased past times the subscribers”. Thus the sum deposited inwards Pension Fund may or may non grow depending on the fluctuations inwards the portion market. After attaining lx years of historic menses i.e., at the fourth dimension of retirement, 60% of the accumulated sum inwards the Pension Account of the employee volition live refunded in addition to the residuum 40% volition live deposited inwards an Insurance Annuity Scheme. Monthly sum received from the Insurance Annuity Scheme is the monthly pension i.e., Pension is non paid past times Government, but past times the Insurance Company in addition to thence NPS is null but Pension Privatization..
Thus it tin give the axe live seen that the growth of the accumulated sum inwards the Pension fund depends upon the vagaries of portion market. If the portion markets collapse, every bit happened during the 2008 basis financial crisis, in addition to so the entire sum inwards the pension fund may vanish. In that illustration employee volition non larn whatever pension. Every fluctuation inwards the portion marketplace volition deport on the futurity of pension of those employees who are covered nether NPS. Uncertainty virtually pension in addition to retirement life looms large over their heads. Even if at that topographic point is a stabilized portion marketplace the 40% sum inwards the annuity scheme is non plenty to larn 50% of the final pay drawn every bit pension, which is the minimum pension every bit per sometime pension scheme. Many employees who entered inwards service afterward 01-01-2004 has retired inwards 2017 in addition to 2018 afterward completing 12 & xiii years of service. They are getting Rs.1400- to Rs.1700- only every bit monthly pension from Insurance Annuity Scheme. If they get got entered service inwards 2003 i.e., inwards the sometime pension scheme, they would get got got 50% of the final pay drawn every bit pension dependent area to a minimum of Rs.9000- every bit minimum pension, that likewise without giving whatever monthly contribution towards pension from their salary. In short, NPS is null but NO PENSION SYSTEM.
As per clause 12(5) of the PFRDA Act fifty-fifty the employees in addition to pensioners who are non covered nether NPS, tin give the axe live brought nether the Act past times a Gazette notification past times the Government. Thus NPS is a Damocles’ sword hanging over the caput of all employees in addition to pensioners.
Who is the beneficiary of this pension reforms? As inwards the illustration of every neo-liberal reforms, the ultimate beneficiary is the Corporates. The huge sum collected from the workers through pension fund is invested inwards portion marketplace past times the Pension Fund Managers in addition to this sum inwards plow tin give the axe live utilied past times the multi-national Corporates for multiplying their profit. Amount deducted in addition to credited to the Pension fund from each newly recruited employees summation the employer’s portion sum volition rest amongst the pension fund in addition to portion marketplace for a menses of minimum thirty to 35 years i.e., till the historic menses of lx years. During this long menses of 35 years crores in addition to crores of rupees volition live at the disposal of portion marketplace controlled past times multinational corporate giants. Ultimate causality volition live the piteous helpless employee/pensioner.
Confederation of Central Government Employees in addition to Workers in addition to All Bharat State Government Employees Federation (AISGEF) has been opposing the NPS from the real showtime in addition to a i solar daytime blast was conducted on 30th Oct 2007. It was i of the primary need inwards all other strikes during these period. The crusade in addition to fighting against NPS continued in addition to every bit of instantly the subjective in addition to objective weather condition for a bigger fighting against NPS has emerged every bit almost 50% of the full employees inwards Central, State, Public sector in addition to Autonomous bodies are instantly covered nether NPS in addition to are becoming to a greater extent than in addition to to a greater extent than restive in addition to agitated. seventh Central Pay Commission Chairman Retired Supreme courtroom Judge Sri. Asok Kumar Mathur has correctly pointed out that “Almost a whole lot of Government employees appointed on or afterward 01-01-2004, were unhappy amongst New Pension Scheme. Govt. should get got a telephone shout out upwards to expect into their complaint”.
As per the recommendations of seventh CPC, Central Government appointed a Committee called “NPS Committee” for streamlining the performance of NPS. The Staff-side has demanded earlier this Committee to bit NPS in addition to guarantee for 50% of the final pay drawn every bit minimum pension dependent area to a minimum of Rs.9000-. Even though, the Committee has submitted its written report xviii months back, the Government has non withal disclosed the recommendations of the Committee.
Confederation in addition to AISGEF has decided countrywide intensive crusade culminating inwards i solar daytime blast on 15th Nov 2018 demanding that the Defined Contributory Pension Scheme (New Pension Scheme - NPS) imposed on novel entrants must live scrapped in addition to the Government should reintroduce the Defined Benefit Pension Scheme (Old Pension Scheme - OPS) that was inwards style for a century or more. We are also exploring the possibility of organizing an indefinite blast inwards the coming days alone on i need i.e., SCRAP NPS, RESTORE OPS for which wider consultations are beingness made amongst all like-minded organizations.
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