The Hindu Business Line : Make pension facility available to all citizens: Chidambaram

Mumbai, Aug. 29 The Pension Fund Regulatory & Development Authority is likely to design pension schemes tailored for the private citizen on the lines of the New Pension Scheme for government employees that were introduced in 2004.

The Union Finance Minister, Mr P. Chidambaram, urged the authority to create new schemes so that a pension facility would be available to all Indian citizens.

The Minister was speaking at the launch of Central Record-keeping Agency (CRA) for the New Pension System (NPS). National Securities Depository Ltd has been appointed to operate as the CRA for the NPS.

Of the estimated workforce of 425 million in India, less than 15 per cent have any kind of access to pension, said the Minister.

In addition, the unfunded pension liabilities of the Central and State governments would be in excess of 50 per cent of the country’s GDP, he said.

Should there be an actuarial review, there would be several “time bombs” found ticking away, he added.

The NPS is the only logical and compassionate answer to the demand of working class, he said.

The Finance Minister appealed to all the state governments to join the NPS as soon as possible.

As of now, 19 States have shown in-principle willingness to join the new pension system, among whom five have already signed up.

The NPS was introduced by Union Government for its new employees recruited from January 1, 2004. Under the system, each new government employee will open an account with the CRA and will be identified through a unique Permanent Retirement Account Number.

Deductions will be made from the employee’s salary on a monthly basis, with an equal contribution made by the Government.

Corpus

The whole corpus of this fund will get invested through the PFRDA-appointed pension fund managers.

Tata Consultancy Services was the systems integrator for implementing the CRA system.

It will continue to support and maintain the CRA and provide enhancements and ensure scalability as the number of records increases, said the company.

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