The central government employees’ associations have rejected terms of reference of the committee appointed to review the National Pension System (NPS). In a submission to the Finance Secretary, who is also the Chairman of the committee, employees’ bodies urged for restoration of Old Pension Scheme (OPS).

In its submission during a meeting with Finance Secretary recently, National Council (Staff Side) of Joint Consultative Machinery for Central Government Employees (NCJCM) reiterated the following two demands.

One, withdraw the NPS implemented to the employees who were recruited on or after January 1, 2004 and bring them all under the ambit of Old Pension Scheme governed as per CCS (Pension) Rules, 1972.

Also read: OPS, NPS and the AP alternative

Second, implement the GPF (General Pension Fund) scheme to the employees who were recruited on or after January 01, 2004 by depositing the accumulated employees’ contribution along with the returns to the GPF Accounts of the employees.

“No central government employees organisations and the Staff Side of the National Council–JCM have ever demanded for any improvement in the NPS. Therefore, the terms of reference are not acceptable,” Shive Gopal Mishra, Secretary of NCJCM, said in communication to all its members.

The NPS is a contributory pension scheme where employees and employers (government in this case) contribute money to a corpus that will be used to pay pension after retirement. Under OPS, employees get defined pension after superannuation and the entire cost is borne by the employer.

Also read: Shift to Old Pension Scheme by 5 States is a fiscally regressive step: ICRA

Restoring OPS has become one of key political issues after opposition ruled States such as Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have decided to replace NPS.

The newly formed Congress government in Karnataka has indicated that it would look into OPS restoration issue. Though the Centre has been maintaining that going back to NPS will be a financial disaster, OPS issue could become a major political issue ahead of the 2024 general election to the Lok Sabha. And, it is believed that this has led to the formation of a four-member committee under the chairmanship of Finance Secretary TV Somanathan to suggest measures to improve the pensionary benefits of government employees covered under the NPS.

The other members of this committee are the Secretary, Department of Personnel and Training, Ministry of Personnel, Public Grievances and Pensions; Special Secretary (Personnel), Department of Expenditure, Ministry of Finance; and Chairman, Pension Fund Regulatory and Development Authority (PFRDA).

The terms of reference of this panel are:

(i) Whether in the light of the existing framework and structure of the National Pension System, as applicable to government employees, any changes therein are warranted;

(ii) If so, to suggest such measures as are appropriate to modify the same with a view to improving upon the pensionary benefits of government employees covered under the National Pension System, keeping in view the fiscal implications and impact on overall budgetary space, so that fiscal prudence is maintained to protect the common citizen.

The committee may also co-opt any officer of the Central government as part of its deliberations whenever such a need is felt by the panel, the Finance Ministry has said. However, no timeline has been specified for the submission of the report.

Meanwhile, the panel has started taking feedback from various stakeholders.

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