2023-11-06 21:03:27
Thiruvananthapuram ∙ The report of the re-examination committee says that the participation pension scheme does not benefit much from the government employees in Kerala as their service period is generally short. The average age of government employees in Kerala is 31 years. But under the central government it is 27 years. A person who joins government service at the age of 36 will get only 25 years of service. Retirement age for participating pensioners is 60 years. Even if the government contribution to the pension fund is increased from the current 10 percent to 14 percent, the pension will be Rs 5,422 (if the salary is Rs 10,000 per month). About 30 percent of state government employees enter service at the age of 36. the
At the same time, even when it is said that the participation pension scheme can be withdrawn, it cannot be said that this backwardness is a good decision and wrong decisions should be withdrawn, says the committee report. There has been no flaw in the implementation of the Participatory Pension Scheme. But the government should take steps to make the scheme more attractive. Kerala is one of the last states to implement participatory pension in the country. All states have implemented this scheme. Only Tripura implemented it following Kerala.
In 2004, when the Central Government implemented the Participatory Pension Scheme, the government contribution to the fund was 10%. The central government contribution has been increased to 14 percent of basic pay and dearness allowance with effect from April 1, 2019. Employee share was kept at 10 percent. After this, Maharashtra, Bihar, Karnataka, UP and many other states increased the share to 14 percent. Kerala should also increase this to 14 percent.
The government provides exgratia pension to those who do not have 10 years of service. They are not entitled to gratuity. The highest ex-gratia pension is Rs 10,600. It should also be given to participating pensioners with less than 10 years of service. If they have written the PSC examination, appeared in the interview or published the rank list before 1st April 2013 when the participatory pension was implemented, they should be given an opportunity to join the old pension scheme. Judicial officers prefer to continue with the old pension scheme. There are some court rulings in this regard. The committee pointed out that the state government should take an appropriate decision before the courts intervene in this matter in Kerala.
Loss now, profit later
THIRUVANANTHAPURAM ∙ It is reported that the government will be able to save a large amount of money in the future through the participation pension scheme, even though it is costing more now. Statutory pension to continue in Kerala till 2039. After that no one will retire from government service for 5 years. Because as per statutory pension the retirement age is 56 years whereas participating pensioners retire at 60 years. There will be no retirement from 2039 to 2044. Now, apart from paying the statutory pension, the pension expenditure of the government is increasing as it has to pay the contribution to the contributory pension scheme. This will continue for 25 years. Today, the government spends half of the salary on pension, but following 25 years, it will be enough to spend only 10% of the salary.
After 10 years of inception, the growth of Participatory Pension Fund is 10 percent. All 3 fund managers LIC, SBI and UTI have reported the same growth. Growth can be high in the long run. If the pension fund grows well, the pension will be more than the final salary. Those with longer service can get bigger pension. Because Albert Einstein said: “Compound interest is the eighth wonder of the world.” Those who know it will take it. Those who don’t know will continue to give it,” says the report of the committee.
Withdrawal will lead to fiscal crisis: Samithi
Thiruvananthapuram ∙ The review committee report warns that if the participation pension scheme is withdrawn, the government will face a very serious financial crisis in the future. The implementation of the Participatory Pension Scheme will not reduce government expenditure now or in the near future. Pension costs will decrease by 2040. The government spends regarding 20 percent of its revenue for pension purposes. If the Participatory Pension Scheme is centralised, the EO cost will be reduced to 4.2 per cent in the future. The amount saved in this way can be spent on other development projects. Rt. said that if the project is withdrawn, Kerala will be far behind in economic security than the states that have not withdrawn. Judge S. Satishachandra Babu Chairman and P. Marapandian and Prof. D. Narayana as members of the committee stated in the 116-page report.
CENTRAL CIRCULAR THANA: No barrier to withdrawal
The review committee points to the central government’s circular of September 2020 as an example that there are no barriers to buy back the share invested in the pension fund. This order provides an opportunity for those who completed the recruitment process before the implementation of the scheme to switch to the old pension scheme.
Accordingly, the State Government has the power to withdraw the Participatory Pension Scheme. The government can withdraw from the agreement signed with NPS Trust and NSDL.
The amount paid so far, including interest and profit, can be transferred to the General Provident Fund of the employees. The share paid by the government can also be recovered by the government. In the agreement signed by the state government with the NPS Trust and NSDL, there is no withdrawal clause in the scheme. The Committee clarifies that withdrawal from the agreement cannot be prevented for that reason.
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