According to employee leaders, in fact, the government only wants to talk about NPS reforms, whereas employee organizations are demanding OPS.
There is a debate going on in the country about the restoration of ‘old pension’. Government employee organizations are continuously pressurizing the Center that they want only guaranteed old pension. The Finance Ministry committee has already held discussions with the representatives of the Staff Side ‘JCM’ on July 15. The employee organizations did not seem to agree with the things said by the government in that discussion. Now PM Modi will hold talks with the representatives of the National Council of Staff Side (JCM) on Saturday.
According to employee leaders, the government actually wants to talk only about NPS reform, while employee organizations are demanding OPS. National President of National Mission for Old Pension Scheme India, Dr. Manjit Singh Patel, says that employees want only a guaranteed pension system. He has also suggested the government the formula as to how the government can convert NPS into OPS. Patel says that if all the benefits of OPS are being received in NPS, then the name does not matter. Any name can be given to the pension scheme. He has given such a suggestion to the government, in which by converting NPS into OPS, the central government can return revenue of Rs 1 lakh crore every year.
According to Dr. Manjit Patel, with the aim of reducing the financial burden on the government and making arrangements for pension from the market, the National Pension System was implemented by abandoning the old pension system from 01.01.2004. This new pension system was implemented at different times in all the states except West Bengal. For the last seven eight years, big movements are going on in the states and the Center against this system. Some states like Sikkim, Nagaland, Punjab have formed committees on this issue and many states like Himachal, Jharkhand, Rajasthan etc. have issued orders to re-implement the old pension. Due to the increasing pressure of the movement, the central government also constituted a committee to review the NPS in April 2023 last year. However, the report of the committee is yet to come. Meanwhile, a debate has started that the old pension will prove to be a burden on the country’s economy and it will make the states bankrupt.
This is the difference between the new and old pension system…
According to the National President of National Mission for Old Pension Scheme India, now it is necessary to understand what are the basic differences between the new and old pension system. In the old pension, a minimum contribution of 7 percent was taken in the name of GPF. The employee could deduct it as per his wish equal to the basic salary. The government guaranteed interest on this portion. The employee could withdraw this money as per his convenience. On retirement, he used to get this entire money in lump sum. On retirement, he used to get 50 percent of his last salary separately as pension every month. This money kept increasing due to DA. The pensioner also got the benefit of pay commission. In the system that has been made now, just like GPF, but 10 percent is deducted as CPF. The government also contributes 14 percent from its side as against 10 percent. LIC, UTI and SBI invest it in the share market.
For them, the NPS system has become a curse…
Patel explains, however, there is no guarantee of interest on this money. Whatever corpus is collected on retirement, 60 percent of it is given to the employee in the form of fund. 40 percent fund has to be invested in the form of annuity for pension. Now the problem is that employees who will retire after 25, 30 years of service can get a decent pension. For those who are retiring after 15, 20 years of service, the NPS system has become a curse. The reason is, in such a job, the corpus is very less. On 40 percent of that, the pension is even less. Due to this, especially in the states, people are getting pension of Rs 2000 to 3000. This is also the main reason for the protest. In the old pension system, there was another guarantee that no one’s pension could be less than Rs 9000. If the amount was less, then he was given Rs 9000 pension along with DA. Due to this, the guarantee of old age social income security of the employees remained covered.
The government will have to make some changes in NPS…
Now it needs to be seen whether the old pension can really bankrupt the country or a state. Can it be implemented again or can NPS be converted into OPS. According to Patel, the study on this subject says that yes, without ending the NPS system, it can be made like OPS or OPS itself by making some changes. The first thing is that the government did not give any contribution in the old pension, whereas in NPS it has to give 14 percent extra salary. On retirement, the government gives 45.86 percent extra fund to the employee. This can be managed. If the government makes a provision in NPS itself that the contributions of the employee and the government will be separate. The employee’s contribution will be given fixed interest like GPF. This facility should also be made that the employee can increase his contribution from 10 percent to 50 percent. Due to fixed interest, all employees can increase their contribution two to four times which can increase the liquidity and investment of the market unexpectedly.
About 6000 crore rupees are received every month …
Since the return of NPS has always been more than GPF in the last 20 years, it is not a big challenge to guarantee 7 percent on the contribution of employees. Banks should also do this, because they get about 6000 crore rupees every month from 85 lakh employees across the country. This is a very big thing. If this is stopped, then it will become difficult for these banks to run. On retirement, 60 percent of the total corpus fund was given to the employees. Not only will it not be needed, but the employees will only get their money back. By doing this, there will be an additional saving of 45.86 percent in the government fund. This can be used for pension fund / annuity. This can also be understood from this table:-
How to get 50 percent pension on retirement …
According to Manjit Patel, the second thing is how to give 50 percent pension to the employee after retirement. This is also not a very difficult task. In NPS, we see that the government contributes 14 percent of the additional salary every month. During 30 years of service, we see that this contribution becomes so much on the basis of about 11 percent return that pension equal to OPS can be given from it. If the government makes arrangements to give pension equal to OPS from its contribution, then this corpus will come back to it, whereas in NPS both the contributions ultimately go to the employee and his family. In this way, we will find that the money which the government contributes for the pension of an employee during the entire job, can be returned to the government in lump sum on retirement. This process will create such a cycle that a permanent pension fund will be created. The biggest thing is that after the death of any pensioner, if his spouse is alive, then only 60 percent of the final pension has to be given to him as family pension. If we look at the life expectancy of India, then we find that only 30 percent of people live till the age of 70 years or more after retirement. The maximum pension has to be spent on them. In most cases, this expenditure keeps decreasing every year, because every year some pensioners die.
Return of up to Rs 1 lakh crore per year to the government …
According to Patel, in the case of employees working in the central government, retirement takes place only after about 30 years of service, so there is no problem of adequate corpus. In many states, relaxation has been given to get jobs till 40, 45 years. Therefore, employees get jobs at the maximum age, where the corpus on retirement after less service is also very less. However, there is a provision of different years of service for 50 percent pension in states. Like 25 years in Rajasthan, 20 years in Uttar Pradesh, 33 years in Chhattisgarh etc. If the service is less than this, there is a provision of less pension in the same proportion. This rule can also be followed in giving pension from government funds and in cases of retirement before completing 20 years of regular service, this problem can also be solved by the provision of minimum pension of Rs 9000 plus dearness allowance. This will also not put any special burden on the government. Dr. Patel says that according to a study, by doing this, the government can get a return of up to Rs 1 lakh crore per year from the year 2033.
