Lok Sabha Question No. 2954 (UNSTARRED), answered on 2018-12-28
Subject: National Pension System
Ministry: FINANCE
Asked by: L.R. Shivaramegowda, Tejpratap Singh,Yadav, ANJU BALA, VIRENDER KASHYAP, DODDAALAHALLI KEMPEGOWDA SURESH

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

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## 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 impact on 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:

## Budget consumed

| Head of Accounts                            |   Amount (in crores) (Provisional) |
|---------------------------------------------|------------------------------------|
| 2071 Pension &other retirement benefits     |                          145745    |
| 3001-101 Indian Railways Pensionary charges |                             366.85 |
| 3002-11 Indian Railways Pensionary charges  |                            1996.97 |
| 3003-11 Indian Railways Pensionary charges  |                              21.07 |
| 3201-07 Pension-Postal Services             |                            8511.33 |
| Grand Total                                 |                          156641    |

Budget for the financial year 2017-18 under NPS-AR is as under:

| Budget Estimate 2018-19   | Expenditure 2018-19             | Budget Estimate 2017-18   | Expenditure 2017-18   |
|---------------------------|---------------------------------|---------------------------|-----------------------|
| Rs. 90.20 cr              | Rs. 59.71 cr (as on 30.11.2018) | Rs. 66.21 cr              | Rs. 65.65 cr          |

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