Pension woes: Rajasthan government likely to revert to old plan
In election year, the state is aiming to woo lakhs of government employees whose ballot could go a long way in deciding the assembly poll outcome.
On the demand of the state government employees, the chief minister’s office (CMO) asked the finance department to consider implementation of the old pension scheme while abolishing the National Pension Scheme (NPS).
“We raised the issue with a ministerial sub committee and its members gave an assurance that it will be considered positively. On our demands, the CMO has shot a letter to the finance department to examine implementation of the old pension scheme. I think there should be no issue bringing the old pension scheme as it would not cause any additional financial burden on the exchequer,” said Abhimanyu Sharma, president of the Rajasthan Secretariat Employees’ Union.
After such a demand was made, Chief Minister’s special secretary Suresh Gupta asked the finance department to examine the issue.
The employees’ unions are pressing for the old scheme as it mandates a fixed pension to the employees after the retirement age of 60. Moreover, employees under the very scheme are eligible to avail loan against the amount deducted from their salary. However, in NPS, there is no surety of a chunky pension amount after retirement.
“Under the NPS, the state government and the employee contribute towards building a pension corpus payable at the time of retirement by way of annuity or lumpsum as per norms. The employee makes a contribution of 10 per cent of his or her basic pay + grade pay + dearness allowance as mandatory contribution to the scheme.
The government makes a matching contribution. In the old scheme, the contribution was 10 percent of the salary and the amount deposited was in the general provident fund (GPF), which gives interest too. The employees could easily avail loan against the amount deposited,” said Sharma, divulging the reason on why they prefer the old pension scheme.
Another contentious feature of the NPS is that the employee can exit the scheme in or after the age of 60. At the time of exit, it would be mandatory for him/her to invest 40 per cent of pension wealth in an annuity scheme from an authorised insurance company which would provide pension during the lifetime of the employee.
Those recruited after 2004 have to subscribe to the NPS while pre-2004 employees are getting the old pension.
Source : DNAIndia