Though the Pension Fund Regulatory Development Authority (PFRDA) ordinance has been referred to the Parliamentary Standing Committee on finance, the Left has said that they would not accept anything less than total withdrawal of the new scheme proposed in the ordinance.
The new scheme, applicable for all Central government employees who have joined service from January 1, 2004, marks a shift from defined benefit to defined contribution system.
Irrespective of the standing committee report, we wont let the government introduce the new pension scheme. They must reverse the system and go back to the defined benefit system at the earliest, CPI leader Gurudas Dasgupta told FE.
The government had promulgated PFRDA ordinance in December last, introducing the new pension system. A Bill to enact the ordinance, was introduced on March 21. However, due to huge protests from the Left parties, the issue had to be referred to the Finance Investment Committee. It may be noted that the ordinance will lapse on April 8.
While presenting Budget 2004-05, finance minister P Chidambaram had said that he would soon make the new system operational with the setting up of the regulatory authority.
According to official data, there are about 40,000 new Central government recruits, who would come under the new pension scheme, which is designed for all Central government employees, joining the services from January 1, 2004 onwards. Until the new system is in place, the government would pay an 8% interest to the employees.
As per the ordinance, there would be five members in the PFRDA.
Eight state governments, including Rajasthan, Andhra Pradesh, Tamil Nadu, Himachal Pradesh, Chhattisgarh, Jharkhand, Karnataka and Orissa, have also taken up the scheme.