New Bill: UPA-II Government introduced the Pension Fund Regulatory and Development Bill on 24.3.2011 in Lok Sabha. This bill seeks to legalize the New Pension System implemented in Central Government and Railways w.e.f. 1.1.2004 by an executive notification.
The introduction itself has to be approved by a majority of MPs present in the Lok Sabha. The Congress wanted to pass the same with a voice vote. But Shri.Basudeb Achariya, MP and leader of CPI(M) in Lok Sabha, demanded division of votes in support and against. There were only 159 members present at the time of introduction. If only UPA-II allies were present to vote the introduction of bill would have been defeated. This being a finance bill if defeated Government will have to resign. Afraid of this consequence the Congress sought the support of BJP. The BJP came to the rescue of Congress and supported the bill. Because, the New Pension System itself was introduced by the BJP in the year 2003 and was continued the same by the Congress later on. Out of the159 present 115 MPs supported and 43 opposed. The introduction of the Bill was approved by the Lok Sabha. This does not mean the Bill is passed. It has to be passed by both the houses after full discussion. , and then only it will become an Act.
The Congress and the BJP have been behaving as if they were rat and mouse in all other issues. But in the issue of New Pension – an anti-worker bill- both are one.
The NRMS an affiliate of BRMS and BMS belonging to BJP leaders should explain its stand.
NEW PENSION SYSTEM
Those who are appointed w.e.f. 1.1.2004 are not eligible for [pension, commutation of pension, Family pension, Gratuity, PF. They are governed by New Pension System. Minimum pension of Rs.3500 does not apply to them since minimum pension is not guaranteed. The pension will not increase every time price increases [DA or Pay Commission is implemented]
INVESTMENT IN SHARE MARKET
Every month 10% of Pay and DA including 30% of Running Allowance will be deducted and Government will grant equal amount. There is no interest for the amount as is for PF. The amount will be transferred to the trustee bank, Bank of India appointment by interim PFRDA [Pension Fund Regulatory and Development Authority]. They have also appointed three Pension Fund Managers. They are SBI Pension Fund Pvt., Ltd, LIC Pension Fund Pvt., Ltd and UTI Retirement Solutions. All the three by their name seem to be government owned, but infact they are private bodies. They will invest the money in share market and bonds of firms which may be Government or private. At-present 15% has been invested in share market and 85% in bonds. If the bill is passed then 50% to 100% of Pension Fund will be invested in share market.
NO ASSURANCE: The PFRDA has announced that “there is no assurance or guarantee that the investment objectives will be achieved.” “The fund may increase or fall,” “there are several risks including the LOSS OF PRINCIPAL”.
When one retires at 60 years of age he will get 60% for his use. He has to invest balance 40% in an insurance company purchasing an annuity. If he retires before the age of 60 he will get only 20% and balance 80% has to be invested in an annuity. That company will invest the money in share market and give pension according to the returns.
AMERICAN EXPERIENCE: In America in the recent market crises $ 3 lakh crores of retired employees was wiped out. They are in the street.
If a person is wealthy and has everything for his life guaranteed there is no objection to play the gamble with some amount. The pension is the bread and butter of the retired employee. It cannot be left to the vagaries of market risks including the LOSS OF PRINCIPAL.
ANNUITY SCHEME NOT FOR FAMILY : The Government Notification says the annuity will provide pension for the family. But Akshay-VI, an LIC annuity scheme does not guarantee any family pension. If a retired employee invests Rs.5 Lakhs he will get only Rs.5,000/ every month. No commutation, no DA. No increase whenever Pay Commission is implemented. Whenever market affected he wo’n’t get even this Rs.5,000. After the death the pension ends. Family will get nothing. Rs.5 lakhs invested will be lost.
If the employee dies or becomes disabled during service, in the old system, there is family pension, Gratuity or disability pension. After struggles the Government has agreed to extend these facilities to those covered by the New Pension also. But only temporarily. If the bill is passed this will also go.
EXPENDITURE…? They say that pension expenditure is the reason for the government to hand-over this to private. Even before introduction of Pension in Railways, before 1957, there was Contributory PF Scheme in which Government gave its contribution equal to the employees’ contribution. Only in place of Government Contribution Pension was introduced.. In place of Special Contribution the Death Cum Retirement Gratuity was introduced. Even in the New Pension System there is Government Contribution.. Instead of taking that and paying pension Government is handing over both the contributions to private without the willingness of the employees. This is authoritarian in nature. At the same time withdrawing the right of Gratuity is also against the Gratuity Act.
Gayathri Committee: The Gayathri Committee [Bangalore] appointed by VI Pay Commission has clearly questioned the expenditure aspect. It says that 54% of pension expenditure is for “Defence”. They have been exempted from the New Pension System. For Railways there is a separate fund allocated in every budget and therefore there is no expenditure for the Government.
The ratio of Government expenditure for salaries and pension to GDP was 2.7 in 1960 and has come down to 1.8 in 2004-05. This will further come down to 0.54 in 2027-28 according to Gayathri Committee Report [Bangalore].
The reason is not expenditure, but ideology. They are anti-working class and pro-capitalism. They are pro-liberalization, privatization and globalization.
BJP and Congress one: That the BJP and Congress are one in this anti-worker policy has been exposed by their collusion to pass the introduction of this bill. The Bill was first introduced by the UPA-I. Since left opposed it the UPA-I withdrew it afraid of the support being withdrawn. Now the same bill has been introduced with the only change in the name of the system from “New Pension System” to “National Pension System”.
Except left ruled states of Kerala, West Bengal and Tiripura all State Governments of Congress, BJP, DMK etc., have implemented “National Pension System”.
NFIR nor AIRF are one: Neither NFIR nor AIRF joined the strike of State and Central Government Employees against this system. They have not passed even a resolution. On the contrary Shri.Umraomal Purohit, President of AIRF is one of the trustees in New Pension System Trust which implements this New Pension System. Therefore, the workers have no other alternative but to fight against this by organizing the workers in the street, in the Parliament and in the court. The CITU and its affiliates in Railways DREU in Southern Railway and NREU in South West Railway are organizing the workers against this system to fight in all the forums.