Bring back old pension scheme, central government employees write to Cabinet Secretary

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National pension system a disaster for retiring employees, says top body of various government unions; pension of the existing scheme barely 15% of that of the previous scheme

National pension system a disaster for retiring employees, says top body of various government unions; pension of the existing scheme barely 15% of that of the previous scheme

A Federation of Central Government Employees Unions has written to the Cabinet Secretary to reinstate the old pension scheme (OPS), saying the National Pension Scheme (NPS) is a disaster for employees retiring at a advanced age.

The federation said a Defense establishment official who recently retired after more than 13 years of service received only 15% of the insured pension he would otherwise have received under the PAHO.

Under the NPS, the civil servant with a base salary of ₹30,500 received ₹2,417 monthly pension compared to the pension of ₹15,250 he would have received under the OPS.

Another civil servant with a base salary of ₹34,300, received ₹2,506 monthly pension after more than 15 years of service, while under OPS, he would have been entitled to ₹17,150 pension.

The letter signed by the Joint Consultative Machinery (JCM), a supreme body of various government unions comprising Group B and Group C officials, said: “It is amply clear that NPS employees, despite their 10% contribution of their salary each month for all of their service receive a very meager pension and are worse off vis-à-vis the OPS. The pension under the NPS remains static and there is no high cost relief to offset rising prices/inflation as available in the OPS. He said that all central government employees, including paramilitary personnel, oppose the “guaranteed NPS” and demand that the government abandon the NPS.

The Cabinet Secretary is the President of the JCM.

“It is now 18 years since the establishment of the NPS. Employees who were recruited on or after 01/01/2004 have started to retire. From the paltry amount they are now receiving as NPS pension, it is proven to be a disaster for employees retiring in their old age and not a win-win situation,” the letter signed by Shiva Gopal Mishra, National Council Secretary (Personal Side), JCM, said.

Mr Mishra said The Hindu that the NPS was “an atrocity committed on government employees” and that the federation was considering serious measures to draw the government’s attention.

“It’s a do or die situation. The fight will be taken to the national level. We are in contact with the bank and the insurance [employees’] associations. We are aware of the country’s economic situation and are looking for a practical solution, but how can a retired government employee manage his household on a pension of ₹1,800? Mr. Mishra asked.

He added that he had several rounds of meetings with the Cabinet Secretary, the Personnel and Training Department and the Expenditure Department, and was told it was a political matter beyond the remit of the bureaucracy.

The OPS or defined benefit pension scheme provided lifetime income after retirement, usually equivalent to 50% of the last salary earned. The government bears the expenses incurred for the pension.

In 2003, the government of Atal Bihari Vajpayee decided to end OPS and introduced NPS. The scheme, applicable to all new recruits entering State service (excluding the Armed Forces) from 1 April 2004, is a participatory scheme, where employees contribute to the pension fund from their salaries, with matching State, and is market-related.

With the exception of West Bengal, all states have implemented NPS. This year, opposition-ruled Chhattisgarh, Rajasthan, Jharkhand and Punjab announced they would reinstate OPS. In the ensuing Himachal Pradesh Assembly elections, OPS became a key issue in the polls as the hill state is home to many government workers.

Till February, there were 22.74 lakh central government employees and 55.44 lakh state government employees registered in the NPS.

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