BHUBANESWAR: Chairman of Pension Fund Regulatory and Development Authority (PFRDA) Supratim Bandyopadhyay on Friday said the states going back to the old pension scheme (OPS) should take prudent financial decisions.
“It is up to the states to take a call on whether they want to continue with the national pension system (NPS) or go back to their old scheme. But they should think about financial viability vis-a-vis the benefits of pension holders,” he told mediapersons here.
While states like Rajasthan, Chhattisgarh and Jharkhand have already reverted to the old pension scheme, Punjab and a couple of others are learnt to have been considering it. The NPS was introduced for Central government employees covering all new recruits joining the service (except Armed Forces) from January 1, 2004. All states had migrated to the NPS in a year except for West Bengal and Tamil Nadu.
The states are reversing back to the old system owing to huge financial burdens as in the NPS, those employed by the government contribute 10 per cent (pc) of their basic salary while their employers contribute up to 14 pc.
Asked whether such a move would affect the NPS, Bandyopadhyay said though people think the entire contribution of the states will go back, it is not like that. “Their existing contributions will be with us though there will be no fresh contributions. The states know the problem, which is why they had adopted the NPS. Despite that they are going back,” he said.
If the OPS was financially non-viable 18 years back, the PFRDA Chairman said, it is definitely not feasible now also. “We are unable to understand what has prompted them to take such a decision. Our teams are in talks with them and trying to convince them that the decision is not financially prudent,” he said.
The PFRDA Chairman said there are around 1.64 crore NPS subscribers and 3.62 crore APY subscribers in the country. In the individual sector, the growth has been outstanding during the Covid-19 pandemic as against many other financial products.
“The subscribers of NPS grew from 5.4 lakh in 2019-20 to 9.76 lakh in 2021-22 and APY rose from 65 lakh to little over 99 lakh during the same period. The target has been set to achieve 1.5 crore under APY and 15 lakh under NPS in the current fiscal,” Bandyopadhyay said.
‘States need to rethink on going back to old pension scheme’
If the OPS was financially non-viable 18 years back, the PFRDA Chairman said, it is definitely not feasible now also. “We are unable to understand what has prompted them to take such a decision. Our teams are in talks with them and trying to convince them that the decision is not financially prudent,” he said. The PFRDA Chairman said there are around 1.64 crore NPS subscribers and 3.62 crore APY subscribers in the country.
In the individual sector, the growth has been outstanding during the Covid-19 pandemic as against many other financial products. “The subscribers of NPS grew from 5.4 lakh in 2019-20 to 9.76 lakh in 2021-22 and APY rose from 65 lakh to little over 99 lakh during the same period. The target has been set to achieve 1.5 crore under APY and 15 lakh under NPS in the current fiscal,” Bandyopadhyay said.