Politicians are sensing a very ‘Vote catching Bait’ in Old Pension Scheme for govt employees

Person managing ‘public resources’ is not allowed to ‘trade’-Assured Economic Security on retirement makes it still work
Why should not the PSEs employee (who work under similar conduct rules) be also given Pension like OPS?
Why not GOI reverts to OPS for all instead of allowing politicians to use ‘OPS’ as election bait

DAYA SAGAR

It was reported on 16-01-2023 that the Reserve Bank of India (RBI), in one of its reports had made very critical remarks on (Opposition-ruled) states in India adopting the Old Pension Scheme (OPS) saying “A major risk looming large on the subnational fiscal horizon is the likely reversion to the old pension scheme by some states” and observing that annual saving in fiscal resources that the move may entail is short-lived since by postponing the current expenses to the future, states risk the accumulation of unfunded pension liabilities in the coming years.
Not only that RBI is said to have also cautioned states against reverting to Old Pension Scheme which was in place for Central government Employees till beginning of 2004 since it was also Dearness Allowance-linked adding further to the fiscal burden. Question here is why did not RBI ask government in 2003 to stop pension for all retiring after 01-01-2004 instead of those employed on or after 01-01-2004 ?
Similarly it has been on 6th February 2023 that in a written reply to a question in Lok Sabha Minister of State for Finance Bhagwat Karad informed that “The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have informed the Central Government/Pension Fund Regulatory and Development Authority (PFRDA) about their decision to restart Old Pension Scheme (OPS) for their state government employees,” and the same time minister observed that that there is no provision under the Pension Fund Regulatory and Development Authority Act vide which the accumulated corpus of the subscribers, viz governments’ and employees’ contribution towards New Pension Scheme (NPS)alongwith accruals, can be refunded and deposited back to the state government.
Another question here is that in case there is no provision under the Pension Fund Regulatory and Development Authority Act vide which the accumulated corpus of the subscribers, viz governments’ and employees’ contribution towards New Pension Scheme (NPS) along with accruals, can be refunded and deposited back to the state government then why has the government of India given option to some working since 01-01-2004 or after to opt for OPS in 2023 ?
Government of India had discontinued the scheme for retirement pension to central government employees except defence forces appointed after 31-12-2003 and States had done that on different dates after 2004 like J&K State Government discontinued pension for those appointed after 31-12-2009 i.e appointed on 01-01-2010 and thereafter.
For those appointed after 2003 in GOI a new pension scheme was proposed to be introduced which was something like the employees contributory provident fund scheme which was there for the employees in the organised private sector and the Public Sector Enterprises too but was to also have some added an element of ‘retirement’ pension to employees which was to be totally related to the premium earned by the funds invested in “trade” out of accumulated funds with contributions made by the government and employee to the “employees fund”..
Before the discussions are taken further it needs to be noted here that the old pension scheme was to continue for already employed and was for only new employees. It was claimed that the New Pension Scheme had more fanacial support for the retiring employee than the then operating pension scheme had. Question here was that if new scheme had more benefits why that was not adopted for those employed earlier to 01-01-2004 ?It was claimed that the New Pension Scheme had more for the retiring employee than the then operating pension scheme. Why did the unions of government personnel not agitate for new pension scheme in case the new pension scheme was more secure / beneficial ?
It will not be out of place to also mention here that earlier the employees of government companies (Public Sector Enterprises) have been demanding retirement pension like government employees instead of the Employees Contributory Provident Fund scheme pleading that the employer contribution to the fund does not match the social security that the retirement pension scheme offers to the employees where the returns are too meagre as compare to the government employee pension scheme which is presently linked to dearness allowance also along with last drawn salary as well as carries the indirect advantage due to grade revisions with every pay commission.
Imagine cases could be quoted where the government employee retired fifteen to 20 year back may be getting total pension emoluments even more than the wages one drew at the time of retirement.
The PSU/PSE employees of union/ states too pleaded that when the BOD of the companies are appointed by government, the Chairman is mostly from Government , the appointment of Managing Director by deputation from outside or even by promotion ( rarely) from PSE cadres by the Government itself and the policies / plans there are also on the directions of Government why should not the lower cadres working in PSUs/PSE’s be treated like government employees and given wages/ social security like government employees (where the performance of departments is not materially kept in view while deciding pay scales while in PSEs that is kept). But the bureaucracy in Government did not support the PSU demands but now after the Pension Scheme was stopped wef 01-01-2004 for Central government employees / 01-01-2010 for J&K Govt Employees the Bureaucracy too has felt the pinch and hence directly / indirectly demands are being made for old pension scheme for government employees by employee unions / associations who by this time have employees of about 22 year service and some are nearing retirement. The political parties too are finding a very effective vote catching ‘bait’ in the OLD pension scheme and one after another state/ political parting is announcing reversion to OPS. So why should not the PSEs employee ( who too have to work under similar conduct rules) be also taken along by govt. employees ?
PTI reported on 3rd March 2023 that in a major move according to a Personnel Ministry order of 03-03-2023 (office memorandum No 57/05/2021-P&PW(B) dated 03-03-2023 Ministry of Personnel, Public Grievances and Pensions GOI Department of Pensions and Pensioner’s welfare ) the employees who joined the central government services against posts advertised or notified before December 22, 2003, the day National Pension System (NPS) was notified, are eligible to join the old pension scheme under the Central Civil Services (Pension) Rules, 1972 (now 2021).”. References to representations and court cases have also been made in the order. The very clear projections that come out of the said communication depict that the government employees have been put to disadvantage with discontinuation of old pension scheme in 2004 by GOI for some classes of government employees and hence also endorses the genuineness of demands of ‘all’ new recruits for old pension scheme since the National Pension System (NPS) has put the new recruits to a great disadvantage as regards the social security after retirements.
To be Continued
(The author is a senior journalist and analyst of J&K Affairs, [email protected]).