Introduction: This article provides insights into the changes planned for the National Pension Scheme (NPS) in India and the consideration of reverting to the Old Pension Scheme (OPS). It discusses the Government’s intention to offer a guaranteed pension, the composition of the committee formed for this purpose, and its terms of reference in evaluating the NPS and potential changes.
Planned Changes to National Pension Scheme (NPS):
(a) Guaranteed Pension under NPS: The Government is considering offering its employees a guaranteed pension of around 50% of their last pay drawn under the National Pension Scheme (NPS). This proposal aims to provide greater security and assured retirement benefits to government employees covered under the NPS.
(b) Consideration of Reverting to Old Pension Scheme (OPS): There is also a demand to revert to the Old Pension Scheme (OPS), particularly from states like Himachal Pradesh, Chhattisgarh, Rajasthan, and Punjab, where it has already been implemented. The demand for reverting to OPS is increasing among central government employees as well.
Committee Formation and Terms of Reference:
To address these concerns and evaluate potential changes to the NPS framework, the Central Government has constituted a committee. The committee is chaired by the Finance Secretary and includes key stakeholders from relevant government departments and authorities. The committee’s composition and terms of reference are as follows:
Composition:
1. Chairman: Finance Secretary & Secretary (Expenditure)
2. Member: Secretary, Department of Personnel & Training, Ministry of Personnel, Public Grievances and Pensions
3. Member: Special Secretary (Pers), Department of Expenditure, Ministry of Finance
4. Member: Chairman, Pension Fund Regulatory & Development Authority (PFRDA)
Terms of Reference:
1. Evaluate the existing framework and structure of the National Pension System as applicable to government employees.
2. Determine whether any changes are warranted in the current NPS framework.
3. Suggest appropriate measures to modify the NPS to enhance pensionary benefits for government employees covered under the scheme.
4. Consider fiscal implications and the impact on the overall budgetary space to ensure fiscal prudence while protecting the interests of common citizens.
Conclusion: The Government’s move to consider offering a guaranteed pension under the NPS and the consideration of reverting to the Old Pension Scheme indicate a commitment to address concerns related to retirement benefits for government employees. The constitution of a committee with representatives from relevant departments and authorities underscores a comprehensive evaluation process, ensuring that any potential changes to the NPS framework are made with careful consideration of fiscal responsibility and the interests of employees.
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Ministry of Finance
Department of Expenditure
RAJYA SABHA
STARRED QUESTION NO.200
TO BE ANSWERED ON 8th AUGUST, 2023
CHANGES TO NATIONAL PENSION SCHEME (NPS)
QUESTION
200 SHRI DIGVIJAYA SINGH:
Will the Minister of Finance be pleased to state:
(a) whether Government is planning to offer its employees a guaranteed pension of about 50 per cent of the last pay drawn, under the National Pension Scheme (NPS); and
(b) whether Government will consider the demand for reverting to the Old Pension Scheme (OPS), considering multiple States, such as Himachal Pradesh, Chhattisgarh, Rajasthan, and Punjab, have already implemented it and there is increasing demand for the same in the Central Government?
ANSWER
FINANCE MINISTER
(SHRIMATI NIRMALA SITHARAMAN)
(a) to (b) : A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (b) OF RAJYA SABHA STARRED QUESTION NO.200 BY SHRI DIGVIJAYA SINGH TO BE ANSWERED ON 08.08.2023 REGARDING CHANGES TO NATIONAL PENSION SCHEME (NPS).
(a) to (b):
In pursuance of the announcement made by the Finance Minister in the Lok Sabha on 24.03.2023, the Central Government has constituted a Committee being chaired by the Finance Secretary. The composition and the Terms of Reference are as under:
Composition:
| i. | Finance Secretary & Secretary (Expenditure) | : | Chairman |
| ii. | Secretary, Department of Personnel & Training, Ministry of Personnel, Public Grievances and Pensions | : | Member |
| iii. | Special Secretary (Pers), Department of Expenditure, Ministry of Finance | : | Member |
| iv. | Chairman, Pension Fund Regulatory & | : | Member |
| Development Authority (PFRDA) |
Terms of Reference
(i) Whether in the light of the existing framework and structure of the National Pension System, as applicable to Government employees, any changes therein are warranted;
(ii) If so, to suggest such measures as are appropriate to modify the same with a view to improving upon the pensionary benefits of Government employees covered under the National Pension System, keeping in view the fiscal implications and impact on overall budgetary space, so that fiscal prudence is maintained to protect the common citizens.
