NEW DELHI: The government hasn’t yet taken any decision to make changes in the National Pension System (NPS), a top government source told this newspaper. So far, the committee led by finance secretary TV Somanathan has met only three times since it was formed in the month of April. The next meeting will take place on June 28.
“The four-member panel has met only three times so far. The next meeting is scheduled for June 28. Only yesterday (Tuesday) the third meeting took place. These things take time, at least 5-6 months before arriving at any concrete decision,” the source said after media reports emerged that the government will likely assure its employees a minimum pension of 40%-45% of their last drawn salary by restructuring the current market-linked pension scheme.
Meanwhile, the chairman of pension fund regulatory and development authority (PFRDA), Deepak Mohanty, who is also a member of the committee, refused to comment on the reports when this newspaper tried to confirm. Besides, the finance secretary and the PFRDA Chairman, Secretary of Department of Personnel and Training (DoPT) and the special secretary in the Department of Expenditure are also members of the panel.
Finance Minister Nirmala Sitharaman had set up the committee for reviewing NPS, after several non-BJP states decided to go back to the old pension scheme, which is linked to dearness allowance (DA), as it guarantees a fixed pension of 50% of an employee’s last drawn salary without any contribution from own pay. In the current NPS, employees have to contribute 10% of their basic salary and the government contributes 14%. The final payout depends on market returns on that corpus, which is mostly invested in government securities.
In contrast, the old pension system guarantees a fixed pension of 50% of an employee’s last drawn salary, without requiring them to contribute anything during their working life.