The Pension Funds Regulatory Development Authority Bill, which is likely to be tabled in the winter session of Parliament, would also make available an option to subscribers to invest 100% of their funds in government securities.
Beside, the government has also decided to allow an additional optional tier II account to the subscribers. The note said, "This is proposed to be accepted by replacing the existing clause of the Bill with a revised clause." The tier II account would work as a savings account, providing the subscriber the flexibility for withdrawal. However, there would be no contribution from the government directed towards the tier II account.
As per the original proposal, subscribers were restricted from making any withdrawals. However, the parliamentary standing committee, studying the matter, recommended that flexibility to withdraw funds may be allowed.
Though the government is hoping to come to a consensus on the issue, the Left parties and the trade unions have indicated that the proposed clauses are just an eyewash.
"We have not moved from our stand and as long as there is no minimum assured return on the pension funds, we will not allow the new scheme to see the light of the day," Tapan Sen, secretary, Centre of Indian Trade Unions, told FE.
There are over two lakh employees covered under the new pension scheme, which marks a shift from the defined benefit to the defined contribution system. It may be noted that 15 states have already joined the new scheme.