According to sources, operationalising the new pension scheme for employees who joined the government after January 1, 2004, does not require passage of the Pension Fund Regulatory & Development Authority (PFRDA) Bill. The Bill has faced stiff opposition from Left parties.
The sources said the government could change the terms and conditions of employment through an executive order. The NPS envisages investing the monies set aside by the government and employees in specified securities, including equities. Pending its operationalisation, the government has been paying 8% interest on the accumulated funds.
The proposal seeks the Cabinets approval to set up an interim central record-keeping agency (CRA), which would maintain individual retirement accounts of employees in government service since January 1, 2004.
While the PFRDA would supervise the setting up of the CRA, it would also be authorised to float tenders inviting companies to manage the funds. To allay the Left parties fears, the government may ask the PFRDA to entrust the monies of employees only to public sector fund managers like LIC, SBI and UTI Mutual Fund.