The three Left-ruled states — Kerala, Tripura and West Bengal — on Monday once again rejected the New Pension Scheme (NPS) on largely two grounds - the cut in salary and pension of the employees and the absence of government guarantee for retirement benefits in the new scheme.
The Left also said that it is possible to introduce a "sustainable 'Defined Benefit Pension System' (DBPS) along with the extension of social security system for the unorganised sector."
West Bengal finance minister Asim Dasgupta said, "We are not in a position to accept the new scheme and there is a need for a more factual and analytical discussion." Dasgupta also circulated a note, arguing the points why the Left is putting up the red flag to the Pension Fund Regulatory and Development Authority (PFRDA) Bill.
Other than the three Left-ruled states, 19 states have adopted the NPS. And with their support the Centre announced -- after Prime Minister Manmohan Singh's conference with state chief ministers and finance ministers -- that it would soon notify an interim investment pattern for funds collected under the NPS that will allow putting in a part of such amount in stock markets.
The Left has been against the Bill since discussions began on it. They had earlier not agreed to the Government's suggestion that pension funds for group C and D employees, comprising 92 per cent of government employees, would be parked with public sector financial institutes, SBI, LIC and UTI, for three years.
After three years, the employees would have a choice to invest the money in the stock market. Under the new plan, Grade A and B employees would have that option as soon as the scheme is implemented.
The Left felt that if this suggestion is implemented, it would not give the employee assured returns after retirement, as the returns would be linked to market behaviour.
The Left had also pointed out while initially three PSUs will manage the funds, at a later stage private fund managers would come into the picture, further diluting the issue of assured returns.
The Government too has never been keen on accepting the Left proposal that there should be a guarantee that employees after retirement will get 50 per cent of the average salary that he or she got for the last three years. And in case this is not fulfilled, the government should step in to pay the employee.