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, Confederation
