Though the UPA is widely expected to push forward its financial sector reform agenda, a key reform that was to become operational by now will be delayed on official lethargy.
The infrastructure for the New Pension Scheme (NPS), with over 2.85 lakh central government employees already covered under it, is all but ready. But one serious glitch is set to delay its implementation that was to begin by June?the data of individual employees? contributions is yet to be transferred to the appointed central record-keeping agency (CRA).
The Pension Fund Regulatory and Development Authority (PFRDA) of India, which has been acting under executive orders as the PFRDA Bill is yet to be passed by Parliament, has appointed three fund managers? State Bank of India, UTI and Life Insurance Corporation of India?and transferred about Rs 1,300 crore to them in April.
National Securities Depository Limited (NSDL), which is the CRA, has also conducted a successful trial run of its systems three weeks ago.
However, the Controller General of Accounts (CGA), which had been acting as the interim record-keeper for the NPS till NSDL?s appointment, is yet to transfer the account records of employees under the scheme, even though it was told about the June implementation schedule over 18 months back.
?All systems are in place and we are just waiting for the records to be transferred,? PFRDA chairman Dhirendra Swarup said. CGA has now asked the Centre for four more months to transfer the records in the ?correct format?, which means the NPS will only take off in its true spirit sometime after October. Without the actual transfer of records, employees can neither verify their account balances nor the returns thereon.
?The NPS was supposed to be an example of transparency that would serve as competition to the archaic EPFO. However, with funds being invested on a pooled basis without any employee records, there seems to be no difference between the two for now,? a senior economist associated with the pension reforms process points out.
Incidentally, without much fanfare, the PFRDA has also selected the banker for the scheme. ?We have zeroed in on Bank of India on the basis of its branch reach as well as the services it offers. We were very clear that SBI would not be shortlisted as they have a conflict of interest being a banker as well as fund manager,? PFRDA chairman Dhirendra Swarup told FE.
PFRDA has also appointed a six-member board of trustees, which is chaired by former secretary general of the Rajya Sabha Yogendra Narain. The trustees are responsible for supervising the fund managers? as well as NSDL?s operations and report to the regulator, if need be. The board, which includes IIM Bangalore professor R Vaidyanathan and All-India Railwaymen?s Federation president Umraomal Purohit (as an employee representative), has already met twice.