Under the Centres interim investment pattern, modelled on the lines of non-government provident funds, pension funds will be allowed to invest another 25% of the corpus in central government securities, 15% in state government securities and 25% in public financial institutions and others. The remaining 30% can be invested in any of these three instruments.
The NPS was introduced in January 2004 and as many as 5 lakh government employees are part of the scheme. The Centre pays 8% on the corpus, pending a decision on deployment of these funds.
So far, 19 statesboth Congress- and BJP-ruledhave approved the NPS. Three Left-ruled statesKerala, West Bengal and Tripuraopposed the plan even after an appeal from Prime Minister Manmohan Singh earlier on Monday.
West Bengal finance minister Asim Dasgupta said the Left-ruled states were firmly opposed to the proposed pension system. We are opposed to the NPS because it implies a 10% cut in pay for employees and a cut in pension benefit by at least 30% compared with the present system, he said.
The Centres pension expenditure would top Rs 35,000 crore by 2009-10 from Rs 28,963 crore in 2005-06, while for states it could exceed Rs 65,000 crore, compared with Rs 41,660 crore last fiscal.