With the Punjab government yet to notify the detailed scheme and the Standard Operating Procedures surrounding the restoration of the Old Pension Scheme (OPS), the anxiousness among the State employees is only growing even as experts feel that going back to the OPS will have financial implications in the long run.
Punjab government employees are up in arms against the ruling Aam Aadmi Party (AAP) government and have threatened to resort to an agitation if a ‘proper’ notification was not issued right away. The employees are demanding an immediate amendment to the Civil Service Rules and written details surrounding the pension policy, which has not been done in the notification.
On November 18, the Punjab government issued a notification regarding the restoration of the OPS, in which it was stated that all the government employees who were presently being covered under the Defined Contributory Pension Scheme also referred to as the National Pension System (NPS) would be given the benefits of the OPS. However, as the notification pointed out that the detailed scheme and the Standard Operating Procedures would be informed by the State government in due course of time, it raised anxiety among the employees.
‘Sanjha Mulazam Manch’s’ protest
Several employees under the banner of ‘Sanjha Mulazam Manch’, a joint platform of employees, which includes the employees related to various directorate unions, teacher unions, the Punjab State ministerial service union, the Punjab civil secretariat staff association had earlier this week staged their protest in Chandigarh, and now plan to stage another protest on November 30.
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“We will stage protest demonstration against the State government on November 30, and if the notification in accordance with the rules is not issued, we will intensify our agitation. The government should have clearly mentioned the detailed scheme and the Standard Operating Procedures in the notification itself. The notification has been issued without amending the Civil Service Rules (CSR) rules and without mentioning the detailed pension policy,” Sukhchain Singh Khaira, convener of the Joint Front told The Hindu.
The OPS was abolished by the National Democratic Alliance government at the Centre in December 2003 and the NPS came into force on April 1, 2004. Under the OPS, the entire pension amount was given by the government whereas the NPS is a participatory scheme where employees contribute to the pension corpus from their salaries, with matching contributions from the government, and is market-linked.
`Recovering government arrears a challenge’
As the concern surrounding the OPS among employees continues, Ranjit Singh Ghuman, professor of eminence (economics) at the Guru Nanak Dev University, Amritsar has pointed out that while resorting to the OPS was a right and appreciative decision as it was a formidable social and financial security to the retired persons in their old age, the State government would have to face the challenge of getting back the accumulated government’s share of around ₹17,000 crore from the Central Pension Authority.
“The challenge is how to get back the accumulated government’s share which is around ₹17,000 crore from the Central Pension Authority (PFRDA) and what about employees’ share (10%) which is also lying with the Authority. The Authority might have invested that amount in various income-generating schemes, which might be having a long gestation period. The government seems to be linking the implementation of the OPS with the above challenges and therefore the solution may take longer time than expected,” he said.
Asserting that the OPS would certainly have financial implications for the State in the long run when the entrants of the year 2004 retire sometime around 2030, Mr. Ghuman said “the crude estimates indicate that there will be an additional financial burden annually between ₹1000-1500 crore from 2030 onwards, but it is nothing for the State government in view of the benefits of the OPS. Additionally, the government will stop contributing its 14% share towards the pension fund which comes out to be around ₹550-600 crore annually and hence saving. Also, in view of the shrinking number of government employees the pension burden is expected to be small though it is not possible to generate correct estimates,” he added.
The State government meanwhile, maintained that in order to ensure that the scheme being introduced was financially sustainable for the exchequer in future also, the State government would be contributing proactively towards the creation of a pension corpus which would service the pension in future to the beneficiaries of the scheme. This contribution towards the pension corpus would be ₹1,000 crore per annum initially and would gradually increase in the future. In addition to this, the current accumulated corpus with NPS was ₹16,746 crore for which the State government would request the Pension Fund Regulatory and Development Authority to refund this amount.
