India: Pension Fund Regulatory Development Authority (PFRDA) will shortly link ‘National Pension Scheme (NPS)’, with employment guarantee programme like ‘MNREGA (Mahatama Gandhi National Rural Employment Gurantee Act)’ to ensure that each of its beneficiary becomes entitled to pension facilites under NPS, says PFRDA, Executive Director, Mr. P.K. Tiwari.
Delivering his keynote address at ASSOCHAM organized “6th National Conference on Pension, Retirement Planning and Employee Benefits” here today, Mr. Tiwari disclosed that Secretaries level discussions have commenced between Ministries of Finance and Rural Development in this regard because MNREGA falls under the direct jurisdiction of the latter.
The discussions have started on the subject following detailed proposal submitted to Ministry of Rural Development by PFRDA, said Mr. Tiwari adding that after secretary level talks becomes conclusive, relevant Ministers’ involvement would be sought and a cabinet note made for approval of the government. The process will take a little more time before a policy decision is taken in this regard, hinted Mr. Tiwari.
According to him each beneficiary of MNREGA will have to open an account in banks and deposit minimum of Rs. 1000-Rs. 1200 every year, clearly telling the banks concerned that this money should be transferred to National Security Depository Limited (NSDL) which will issue a number to beneficiary of MNREGA scheme so that he becomes entitled for pension benefits after the age of 60 or so.
The government will contribute equal amount in such accounts so that pension benefits are ensured for aam aadmi, said Mr.Tiwari, hinting further that current outgo of central government on MNREGA which works out to be Rs. 70,000 crores p.a. even may be hiked to ensure that NPS covers everybody in lower strata of society.
On the issue of parking surplus funds of pension fund managers in infrastructure and equities, Mr. Tiwari clarified that the regulator will not advice the pension fund managers to place a part of their funds in speculative channels to ensure that public money does not go waste.
In his inaugural speech Minister of State for Finance, Mr. Namo Narain Meena said that under NPS, pension is a shared responsibility of employer and employee to contribute equally. Presently, more than 10 lakh government employees are covered under NPS and this scheme has been adopted by state governments and few PSUs as well.
PFRDA has been taking several initiatives for expanding the reach of NPS among al sections of society and have launched customized models of NPS platform to suit needs of different sections of society. Recently, NPS-Lite, a low cost version of NPS with optimized features for economically disadvantaged persons has also been launched.
Government of India, with a view to promote retirement planning among al sections not statutorily covered by any other provident or pension schemes, have announced that an incentive of Rs. 1000/- per NPS account opened during fiscal 2009-10 and subsequent three years will be given under Swavalamban scheme. Swavalamban benefits will also be available to all subscribers from unorganized sector who have contributed between Rs. 1000-Rs. 12,000/- in a year to their NPS accounts.
Other speakers on the occasion were: Mr. Vinay Rai, Sr. Member, ASSOCHAM Managing Committee and President, Rai Foundation; Mr. Ben Facer, ASEAN and South Asia Business Leader, Retirement, Risk & Finance consulting, MERCER; Mr. D.S. Rawat, Secretary General, ASSOCHAM.
Source: http://www.assocham.org/prels/shownews.php?id= 2560
