UPA-II Government introduced the Pension Fund Regulatory and Development Bill on 24.3.2011 in Lok Sabha. This bill seeks to legalize the New Pension System implemented in Central Government and Railways w.e.f. 1.1.2004 by an executive notification.

NEW PENSION SYSTEM

Those who are appointed w.e.f. 1.1.2004 are not eligible for [pension, commutation of pension, Family pension, Gratuity, PF. They are governed by New Pension System. Minimum pension of Rs.3500 does not apply to them since minimum pension is not guaranteed. The pension will not increase every time price increases [DA or Pay Commission is implemented]

INVESTMENT IN SHARE MARKET

Every month 10% of Pay and DA including 30% of Running Allowance will be deducted and Government will grant equal amount. There is no interest for the amount as is for PF. The amount will be transferred to the trustee bank, Bank of India appointment by interim PFRDA [Pension Fund Regulatory and Development Authority]. They have also appointed three Pension Fund Managers. They are SBI Pension Fund Pvt., Ltd, LIC Pension Fund Pvt., Ltd and UTI Retirement Solutions. All the three by their name seem to be government owned, but infact they are private bodies. They will invest the money in share market and bonds of firms which may be Government or private. At-present 15% has been invested in share market and 85% in bonds. If the bill is passed then 50% to 100% of Pension Fund will be invested in share market.

NO ASSURANCE:

The PFRDA has announced that “there is no assurance or guarantee that the investment objectives will be achieved.” “The fund may increase or fall,” “there are several risks including the LOSS OF PRINCIPAL”.

When one retires at 60 years of age he will get 60% for his use. He has to invest balance 40% in an insurance company purchasing an annuity. If he retires before the age of 60 he will get only 20% and balance 80% has to be invested in an annuity. That company will invest the money in share market and give pension according to the returns.

AMERICAN EXPERIENCE

In America in the recent market crises $ 3 lakh crores of retired employees was wiped out. They are in the street.

If a person is wealthy and has everything for his life guaranteed there is no objection to play the gamble with some amount. The pension is the bread and butter of the retired employee. It cannot be left to the vagaries of market risks including the LOSS OF PRINCIPAL.

ANNUITY SCHEME NOT FOR FAMILY

The Government Notification says the annuity will provide pension for the family. But Akshay-VI, an LIC annuity scheme does not guarantee any family pension. If a retired employee invests Rs.5 Lakhs he will get only Rs.5,000/ every month. No commutation, no DA. No increase whenever Pay Commission is implemented. Whenever market affected he wo’n’t get even this Rs.5,000. After the death the pension ends. Family will get nothing. Rs.5 lakhs invested will be lost.

If the employee dies or becomes disabled during service, in the old system, there is family pension, Gratuity or disability pension. After struggles the Government has agreed to extend these facilities to those covered by the New Pension also. But only temporarily. If the bill is passed this will also go.

EXPENDITURE…?

They say that pension expenditure is the reason for the government to hand-over this to private. Even before introduction of Pension in Railways, before 1957, there was Contributory PF Scheme in which Government gave its contribution equal to the employees’ contribution. Only in place of Government Contribution Pension was introduced.. In place of Special Contribution the Death Cum Retirement Gratuity was introduced. Even in the New Pension System there is Government Contribution.. Instead of taking that and paying pension Government is handing over both the contributions to private without the willingness of the employees. This is authoritarian in nature. At the same time withdrawing the right of Gratuity is also against the Gratuity Act.

Gayathri Committee

The Gayathri Committee [Bangalore] appointed by VI Pay Commission has clearly questioned the expenditure aspect. It says that 54% of pension expenditure is for “Defence”. They have been exempted from the New Pension System. For Railways there is a separate fund allocated in every budget and therefore there is no expenditure for the Government.

The ratio of Government expenditure for salaries and pension to GDP was 2.7 in 1960 and has come down to 1.8 in 2004-05. This will further come down to 0.54 in 2027-28 according to Gayathri Committee Report [Bangalore].

The reason is not expenditure, but ideology. They are anti-working class and pro-capitalism. They are pro-liberalization, privatization and globalization.

We central Govt. employees here by demand to Scrap the New Pension Scheme for central Govt. Employees immediately as it offeres us neither a guaranteed pension, nor gratuity and benefits.

we have also learnt that  Railway Union has called for scrapping of the new pension scheme (NPS) for long as NPS has taken away the rights of Central and State Government employees to have pension and family pension. AIRF is determined to scrap the new pension scheme and compel the Government to cover all Central and State Government employees under pension and family pension scheme.

We central Govt. employees here by once again demand to Scrap the New Pension Scheme for central Govt. Employees immediately as it offeres us neither a guaranteed pension, nor gratuity and benefits.