Note on the proceedings of the meetings, the NPS Committee had with the Staff Side, JCM.
National Council on 20th January, and 17th March, 2017.
As you are aware, the Govt. had set up a committee as per recommendations of the 7th CPC
to streamline the procedure and functioning of the NPS. The Staff Side
of NC JCM was asked to present their views in the matter. The meeting
was on 20th January, 2017. The Staff side made a written
presentation to the committee on the subject. (The note was placed on
the website). However, it also took the stand that the consultation with
staff side could not be held in the manner of a Raj durbar as quite a
number of Associations especially representing the organised Group A
services and the All India Service officers were also invited to the
said meeting. The staff side was assured of an independent hearing.
Subsequently the sub-committee III (The Pension Committee had set up
three sub committees to interact with various stake holders on different
subjects) under the Chairmanship of Ms. Vandana Sharma, Addl.
Secretary of the Department of Pension and Pensioners Welfare convened
a meeting on 10th February, 2017. The Sub- Committee was
more concerned about the applicability of various provisions of the
present rules to the NPS subscribers especially those which are punitive
in character. In the event of a Government servant being found guilty
under the CCS (CCA) Rules, the Government is empowered to restrict,
reduce or reject the Pension and other retirement benefits. Prior to the
meeting, the sub Committee had asked for views on various issues to be
discussed at the meeting. The official Side wanted similar rules in the
case of NPS subscribers. The Staff Side had submitted a written Note in
this regard. The said Note has also been placed on the website. In the
meeting, the Staff Side had made it categorically clear that no such
rules could be imposed on the NPS subscriber as the annuity which he
purchases on the basis of the contribution made at the end of his
service is the product of a financial transaction and cannot be
unilaterally altered at the whims of the employer. Once the
contributions of the employee and the employer is remitted to the
investing agency, the employer ceases to be a stake holder any more in
the scheme.
The third meeting was held on 17th March,
2017. The meeting was chaired by the Secretary Pension. The said
meeting was to specifically interact with the members of the Staff
Side. On behalf of the Staff side, the following comrades took part in
the meeting.
1. Com. M.Raghavaiah (Leader, Staff Side)
2. Com. Sivgopal Misra(Secretary Staff Side)
3. Com. KKN.Kutty(Confederation)
4. Com. C. Sreekumar(AIDEF)
5. Com. Guman Singh and (NFIR)
6. Com. Sreenivasan (INDWF)
As
indicated earlier, several Associations of Group A Officers had made
their presentations. Some of the important points mentioned by them
during the discussions were:
1) Discrimination between pre and post 2004 officials-
2) While Govt. determines the quantum of pension subscription and makes it mandatory it refuses to guarantee a minimum return.
3) Atal Pension Yojana offers better and guaranteed benefit to the Subscribers.
4) The
Government’s assurance that the employees under NPS will get annuity
not less than the minimum pension under the defined benefit scheme and
might even be more was made on wrong assumption in as much as -
a) 100%
of the corpus was taken for computation of annuity whereas as per
the scheme only 40% of the pension wealth alone would b e available.
b) Fund expenses are exorbitantly under- valued.
c) No benefit for the family the case of a Pensioner, who dies at an early age under NPS.
d) Annuity is not cost-indexed.
5) Two
officers at the level of the Secretary to GOI retiring on the same day
in 2037( former recruited in 2003 and latter in 2004 )will have a huge
differential in pension. The 2003 recruitee will have pension 3.25
times of the annuity of the 2004 recruitee. Over a period of next 10
years i.e in 2047,(due to cost indexation) the 2003 recruitee will have
pension 7.4 times of what the 2004 NPS official receives as annuity.
6) In
most of the countries where contributory pension scheme is in vogue,
the Govt’s (employer) contribution is 25% of the salary while that of
the employee is 10%
7) The NPS Contribution do not enjoy the Tax benefits like PPF, EPF, GPF etc.
The
Secretary Pension informed the members that the Committee’s mandate is
only to make suggestions to streamline the NPS procedures and make the
rules simple and transparent. The basic features will not therefore
undergo any change. He concluded that neither the scheme would be
replaced or discarded, nor any guaranteed minimum pension would be
offered. as in both cases Govt. will have to undertake financial
obligations. He clarified that the Sub Committees have been set up to
expedite the work.
The staff Side in their presentation made out inter alia the following points:
a) The
number of employees covered under NPS in increasing day by day and in a
decade’s time, they might become significant segment of the Government
personnel.
b) All
those who are covered by the scheme are extremely critical and resent
that their savings are channelled into private hands to help the
corporate bodies to make enormous profits.
c) There
is no likelihood either now or in any time in future that NPS
subscribers will be able to purchase an annuity equivalent to what the
pensioners under the Defined Benefit Scheme is entitled. The Government
must honour its commitment made to this effect to the staff side in the
National Council, when the NPS was introduced.
d) The
Committee in its report must at least bring it to the notice of
Government that the Staff Side of the JCM is of the firm view that the
cosmetic changes in the scheme will not bring about any tangible benefit
to the subscribers and the Government must as an interim measure
guarantee the pension to NPS subscribers equivalent to what is provided
for the personnel covered under the defined benefit scheme.
e) The Staff Side opined that the committee will be well within its term of reference to suggest.
(i) Cost-indexation
of annuity as the Contribution made by the subscribers and the
Government as employer is 10% of the salary-salary for this purpose
being Basic Pay and Dearness allowance. In other words, in every six
months contribution increases and therefore it is logical that the
annuity is also raised every six months to keep pace with the rate of
inflation.
(ii) Minimum
guarantee is assured by many countries even under the contributory
system of pension and the provision to the contrary in the PFRDA Act
must be recommended to be removed.
(iii) It
is a welcome step that the Govt. has now decided to extend the benefit
of family pension in the case of all NPS subscribers who die in harness.
The family pension can therefore be assured at the prevailing rate for
all NPS subscribers, if necessary by appropriating a one-time
deduction from their pension wealth, at their option, at the time of
retirement.
(iv) To introduce the GPF again as a voluntary option.
(v) All
NPS subscribers must be provided with a payment slip by the heads of
offices indicating the amount deducted, the amount contributed by the
Govt. and the date on which the sum has been made over the to the
fund managers, irrespective of the communication the subscriber is
entitled to get from the PFRDA registry.
(vi) No rules to be framed to link the pension benefit with disciplinary proceedings.
(vii) The present investment pattern prescribed must be reviewed for its viability periodically.
(viii) The
Sub Committee which goes into the issue concerning framing rules may be
asked to interact with the Staff Side once the draft rules are ready.
(ix) In
so far as customer friendly procedures are concerned, the committee may
look at the best international practices with a view to adopt and
incorporate them.
It
could be seen from the deliberations in the committee that nothing
short of replacing NPS with Statutory defined Benefit Pension
Scheme will bring about anything good for new recruitees. Our endeavour
must be in that direction whereby sanctions are generated and
compulsions are felt by the Govt as early as possible.
K.K.N. Kutty
Member, Standing Committee
National Council, JCM &
National President, Confederatio
