A federation of Central government employees’ unions has written to the Cabinet Secretary to restore the Old Pension Scheme (OPS), stating that the National Pension System (NPS) is a disaster for retiring employees in their old age.
The federation said a Defence establishment official who recently retired after more than 13 years of service received only 15% of the assured pension he would have otherwise availed under the OPS.
Under the NPS, the official with a basic pay of ₹30,500 received ₹2,417 as monthly pension as against the ₹15,250 pension he would have been given under the OPS.
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Another official with a basic pay of ₹34,300, received ₹2,506 as monthly pension after more than 15 years of service, whereas under the OPS, he would have been entitled to ₹17,150 as pension.
The letter signed by the Joint Consultative Machinery (JCM), an apex body of various government unions comprising Group B and Group C officials, said: “It is amply clear that the NPS employees despite their contribution of 10% of their wages every month for their entire service is getting only a very meager pension and are worse off vis-à-vis the OPS. The pension under NPS remain static and there is no Dearness Relief to compensate the price rise /inflation as available in the OPS.” It said that all Central government employees, including paramilitary personnel, are opposing the “no guaranteed NPS” and were demanding the government scrap the NPS.
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The Cabinet Secretary is the chair of the JCM.
“It is now 18 years after the implementation of NPS. Employees who were recruited on or after 01/01/2004 have now started retiring from service. From the paltry amount they are now getting as pension from NPS it is proved that it is a disaster for the retiring employees in their old age and not a win-win situation,” the letter signed by Shiva Gopal Mishra, Secretary, National Council (Staff Side), JCM, said.
Mr. Mishra told The Hindu that the NPS was “an atrocity committed on government employees” and the federation was contemplating serious measures to draw the government’s attention.
“It is a do-or-die situation. The fight will be taken to the national level. We are in touch with the bank and insurance [employees’] associations. We are aware about the country’s economic situation and are seeking a practical solution but how can a retired government employee run their household with a pension of ₹1,800?” Mr. Mishra asked.
He added that he had had several rounds of meetings with the Cabinet Secretary, Department of Personnel and Training, and Department of Expenditure, and had been told that it was a policy issue beyond the remit of bureaucracy.
The OPS or the Defined Pension Benefit Scheme assured life-long income post-retirement, usually equivalent to 50% of the last drawn salary. Government bears the expenditure incurred on the pension.
The Atal Bihari Vajpayee government in 2003 decided to discontinue the OPS and introduced the NPS. The scheme, applicable to all new recruits joining Central Government service (except the Armed Forces) from April 1, 2004, is a participatory scheme, where employees contribute to pension corpus from their salaries, with matching contribution from the government, and is market-linked.
Except West Bengal, all States implemented the NPS. This year, Opposition-ruled Chhattisgarh, Rajasthan, Jharkhand and Punjab announced that they would restore the OPS. In the ensuing Himachal Pradesh Assembly elections, the OPS has emerged as a key poll issue as the hill State is home to many government employees.
Till February, there were 22.74 lakh Central government employees and 55.44 lakh State government employees enrolled under the NPS.