Tuesday, 1 January 2019

No Proposal for Replacing NPS with Regular Pension Scheme -Govt informs in Parliament

No Proposal for Replacing NPS with Regular Pension Scheme -Govt informs in Parliament

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES

*****

LOK SABHA
UN STARRED QUESTION NO. 2954
TO BE ANSWERED ON DECEMBER 28, 2018/PAUSHA 7, 1940 (SAKA)
NATIONAL PENSION SYSTEM


2954. Shri L.R. Shivarame Gowda,
Shri Tej Pratap Singh Yadav,
Shrimati Anju Bala,
Shri Virender Kashyap,
Shri D.K. Suresh

Will the Minister of FINANCE be pleased to state:


(a) whether the Government is planning to reconsider the Old Pension Scheme on optional basis for
Central Government Employees on heavy demand of employee associations across the country and if so, the details thereof;
(b) whether the Government has received any representation from various State Governments and
employees’ associations in this regard and if so, the details thereof along with the other major
changes demanded by the employee associations and the reaction of the Government thereon;
(c) Whether the Government has decided to raise the Government contribution in National Pension
System (NPS) to 14 per cent from existing 10 per cent and if so, the details thereof along with
the increased financial liabilities of the Government thereon;
(d) The details of cases of family pension sanctioned so far to the families of deceased Central
Government employees and the payment of compensation made for non-deposit or delayed
deposit of contributions under the NPS;
(e) whether the Government has decided to stop pension scheme to all the Government employees
including Government/Public Undertakings organization, if so, the details thereof and the reasons therefor; and
(f) The amount/percentage of the budget consumed every year to pay pensions to employees
serving in Government jobs in the country?


ANSWER


The Minister of State in the Ministry of Finance
(Shri Shiv Pratap Shukla)

(a) and (b) Representations have been received which inter alia also include the demand that the
Government may revert to old defined benefit pension system. However, due to rising and
unsustainable pension bill and competing claims on the fiscal, there is no proposal to replace the
National Pension System (NPS) with old pension scheme in respect of Central Government
employees recruited on or after 01.01.2004.

(c) Yes, the mandatory contribution by the Central Government for Tier I accounts of its employees
covered under NPS has been enhanced from the existing 10% to 14%. The employees’ contribution
rate would remain at the existing 10%. As informed by the Department of Expenditure, the impacton Government exchequer on account of enhancing the mandatory contribution by the Government
for its employees covered under NPS from 10% to 14% is estimated to entail an additional financial
impact of Rs. 2840 crores on Central Government in the next immediate financial year (2019-2020)
.
(d) Number of Family Pensioners getting pension through Central Pension Accounting Office
(CPAO) by authorised Bank under National Pension System- Additional Relief (NPS-AR) as on
30.11.2018 is 4,779.

(e) The Government of India vide notification dated 22.12.2003 had introduced the National
Pension System (NPS) (earlier known as New Pension Scheme) for its employees and made it
mandatory for all new recruits of the Central Government (excluding armed forces) who joined
service on or after 01.01.2004. The old defined benefit scheme was withdrawn by the Government
for Central Government employees (excluding armed forces) joining service on or after 01.01.2004.
There is no proposal to stop the pension scheme for Government employees.

(f) As informed by the Department of Expenditure, the details of Budget consumed during 2017-18
to pay pension to pensioners and Budget for financial year 2017-18 are as under:

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