Committee to review NPS still engaged in consultations: Finance Secretary

The high-powered committee to review the National Pension Scheme is still engaged in consultations, said Finance secretary TV Somanathan, who heads the panel.

“The committee has been having deliberations. We have met with staff associations of the central government; we have had discussions with all the state governments. We have taken some expert inputs, we have done some more calculations of our own,” Somanathan said, adding that it has also engaged with the Pension Fund Regulatory and Development Authority.

“We are doing a lot of calculations working out some options. So, our work is still on,” he told BT in a post-Budget interaction.

He, however, declined to give a timeline on when the report will be finalised and submitted.

Union Finance Minister Nirmala Sitharaman had set up the high powered committee to review the NPS for government employees in March 2023 and it was constituted in April 2023. The committee was tasked to look into the issue of pensions under the NPS in respect to Government employees and “evolve an approach which addresses the needs of the employees while maintaining fiscal prudence to protect the common citizens”.

It was widely expected that the report may be submitted to the government ahead of the Interim Budget 2024-25 that was presented on February 1 and it could make some announcements with regard to the NPS for government employees.

Other members of the committee include Secretary, Department of Personnel and Training, PFRDA Chairman and Special Secretary, Department of Expenditure.

The need to review the NPS came after several Congress ruled states including Rajasthan, Chhattisgarh and Himachal Pradesh chose to revert to the Old Pension Scheme, which is a defined benefit scheme under which government employees get 50% of their last drawn salary as pension.

Under the NPS that came into effect from January 1, 2004 is a defined contribution scheme.