State govt employees regularised mid-career blame NPS for lower pension

This is being viewed as one of the significant reasons for an inaccurate representation of the estimate of the returns and the pension payout under the NPS amid rest of the government employees, especially serving employees who are yet to retire. Concerns have been triggered after the regularisation of employees, such as panchayat workers, teachers as regular government employees is seen to be the reason for a surge in the number of estimated beneficiaries from the pension scheme in the states. The contention is that the regularised employees have a lower contributory period for availing the pension and hence, will get a lower payout as against the regular government employee.

“In many of the states there are Panchayat employees, teachers etc who originally were not government employees and then at some point they get regularised or converted into government employees. So they come into government service, let’s say, at the age of 50 years. If you come in at 50 years and you retire at 60 years, then in a contributory scheme, you will obviously get a very low pension compared to a flat 50 per cent for a full service. The normal government employees get recruited by examination and come at an age of let’s say 30 years or below…they usually have a minimum 25-year career. The outcome of NPS with a 25-year career is very different from the outcome of an NPS when somebody has a very short career of a few years. But the people who have actually retired till now are people with very short services and those with NPS, which came in 2004, would not have retired as of now…many people are comparing the pension of NPS with this and saying it is much lower than the normal pension. The point is these are people who have only 5-10 years of service. Obviously, their pensions will be very low,” a person aware of the discussions said.

About two-three states including Chhattisgarh, Himachal Pradesh are learnt to have provided their insights on the issue of the regularisation of government employees and the low pension payouts to such employees in their discussions. People aware of the Centre-state discussions insist this issue is different from the debate over the assured returns and market uncertainty for returns under the NPS.

“On an average they might actually get a decent pension (under NPS). But the people who have less than the full service, it is in the nature of a contributory scheme that if you don’t contribute for enough years, you won’t get a good pension. So the problem seems to have become more noticeable for people because they are seeing these examples (of regularised employees) and those examples have very low pensions compared to OPS. They (regularised employees) are the ones who are retiring of late, nobody from NPS would have retired yet as the system itself came into place in 2004. They give their example to somebody saying they are getting only some amount of pension, which creates a sense of alarm among the serving people. But it may not be that bad for a full career government employee. For the majority of the employees, it will be much better,” the person said.
The demand for switching to the Old Pension Scheme has flared up again ahead of assembly polls scheduled in several states and Lok Sabha elections next year.

Thousands of government employees — teachers, doctors, clerks, peons — and those working in the PSUs from Uttar Pradesh, Uttarakhand, Rajasthan, Madhya Pradesh, Chhattisgarh, Himachal Pradesh, Haryana, and other states participated in the “Pension Shankhnaad Rally”, organised by National Movement for Old Pension Scheme (NMOPS) at Ramlila Maidan in Delhi on Sunday urging the BJP-led NDA government to reinstate the Old Pension Scheme before the polls.