Shock to states on old pension scheme, NPS amount will not be transferred

In the matter of going back to the old pension scheme, the PFRDA has told the state governments that their claim on the savings of the employees under the National Pension System (NPS) is not legally valid.

Old Pension Scheme: Pension Fund Regulatory and Development Authority (PFRDA) States have got a big blow due to the new decision taken on the old pension scheme. The Pension Fund Regulatory and Development Authority (PFRDA) says that the National Pension System (NPS)National Pension Scheme) It is not possible to transfer the money saved under the scheme to the states. The Rajasthan and Punjab governments had asked the central government for the money deposited by the employees under NPS and said that they would start the old pension system and they should be returned the money deposited by the employees under NPS.

The pension regulator (PFRDA) has told the state governments regarding the matter of going back to the old pension scheme that their claim on the savings of the employees under the National Pension System (NPS) is not legally valid. The pension regulator, after a detailed legal examination of NPS provisions, has told the states that the deposits of employees cannot be transferred to the government treasury. Explain that from January 1, 2004, NPS was made mandatory for central employees. Later most of the states also adopted it.

According to experts, the legal framework does not allow transfer of funds from employees to employers. NPS is structured with certain tax incentives and the accumulated corpus includes contributions from both the employees and the government. Experts have made it clear that the provisions do not allow such transfer of money to anyone.

Political parties promising to restore old pension

The Chief Minister of Punjab has asked the Chief Secretary of the state to take legal opinion to transfer the employees’ funds to the state government. The state cabinet has approved the proposal to implement the old pension and it has also been notified. But it is not yet clear when it will be implemented. Political parties in poll-bound states are promising to restore the old pension in the election campaign. Rajasthan has demanded NPS fund and has approached PFRDA in this matter.

Rajasthan and Punjab government had made this demand

In fact, the Rajasthan and Punjab governments had recently demanded the amount deposited under the NPS of the employees saying that the old pension system would be implemented. The states had said that after switching over to the old pension system, the state would provide pension to the employees. But, now the matter has become even more complicated due to non-transfer of money. Let us tell you that last week, Union Finance Minister Nirmala Sitharaman also denied the states and said that the money belongs to the employees.

This is the basic difference between old and new pension scheme

Under the old pension scheme, when the employee retires, he gets half of the salary as pension. Because the pension amount is fixed according to the basic salary and inflation rate. Whereas, under the new pension scheme NPS, the pension amount is fixed on the total deposit amount and the return on investment. In this, the employees get 10 percent of the basic salary and DA and the state government also contributes the same amount. The new pension scheme NPS is focused on the stock market and is paid according to the market, whereas under the old pension system, the payment was made from the exchequer.

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English News Headline : Shock to states on old pension scheme regarding NPS amount transfer.