Workers will face greater insecurity after retirement with the NPS

Update from CGPI

Tapan Sen, General Secretary, Centre of Indian Trade Unions (CITU), clearly explains: “The minimum pension amount under the old scheme is Rs 9,000 which has been calculated keeping in mind entry-level minimum wages. Real pension amounts are much higher as nobody retires on entry-level wages. In the new scheme, even those who have worked for a decade are getting as little as Rs 1,000-2,000. This is a disastrous policy.” He points out that through this scheme, people’s money is being used by the government to enhance the profits of the speculators in the share market, at the cost of the government employees.

The government and its spokespersons are promoting the illusion that just like a standard Systematic Investment Plan, long-term capital gains under NPS would be better than before. However, the agitating employees have shown through substantial arguments, that for those retiring after 10-12 years under NPS, the accumulated wealth is too less to provide substantial amount as pensions.

For example, a former employee of the Haryana Electricity Board explains: “The total accumulated money in my NPS account on retirement was Rs 3.25 lakhs even when I got 13% interest rate on it. After 60% of it was paid to me on retirement,

I am receiving less than Rs 700 every month as pension through the annuity scheme”. He was made permanent in November 2006 and retired in 2013. NPS was enforced in Haryana from 2006. He says his colleagues who were recruited not long before him are receiving over Rs 15,000 as pension under the old scheme.