The central government on Tuesday said that the PFRDA Act does not have a provision to return the accumulated NPS corpus, which is being sought by the five non-BJP states that want to relaunch the old pension scheme.
The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have informed the Center of their decision to revert to OPS and have asked for the return of corpus accumulated under the National Pension Scheme (NPS).
“There is no provision under the Pension Fund Regulatory and Development Authority Act, 2013 … the accumulated corpus of subscribers, such as Government contribution, employees’ contribution to NPS, can be refunded along with accrued charges and returned to the state government,” State Finance Minister Bhagwat said. Karad filed a written reply in the Rajya Sabha.
The minister further said that the central government would not consider any proposal to restore the OPS system in respect of central government employees recruited after January 1, 2004.
The NPS was introduced by the central government in December 2003 to replace the defined benefit pension system with a contributory pension system to ensure financial stability of old age income security and to direct small savings to the productive sectors of the economy through prudential regulation. investments.
Since January 1, 2004, it has been mandatory for all new recruits to the civil service (except for the armed forces), and since May 1, 2009, it has been implemented on a voluntary basis for all citizens.
According to PFRDA, 26 state governments, except Tamil Nadu and West Bengal, have notified and implemented NPS for their employees, the minister said, adding, “Such liability under OPS is a defined benefit pension scheme which is an unfunded liability. The state government, it will be secured from their future earnings.” Responding to another question on OPS, Karad referred to the Reserve Bank’s report on Public Finances: Survey of Budgets 2022-23, saying that by reverting to OPS, “states risk accumulating unfunded pension liabilities in the coming years”.
(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)