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Note on the proceedings of the meetings, the NPS Committee had with the Staff Side, JCM - Confederation

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Note on the proceedings of the meetings, the NPS Committee had with the Staff Side, JCM.
Note on the proceedings of the meetings, the NPS Committee had with the Staff Side, JCM.
National Council on 20th January, and 17th March, 2017.  

As you are aware,  the Govt. had set up a committee as per recommendations of the 7th CPC to streamline  the procedure and functioning of the NPS. The Staff Side of NC JCM was asked to present their views in the matter. 

The meeting was on 20th January, 2017. The Staff side made a written presentation to  the committee on the subject. (The note was placed on the website). However, it also took the stand that the consultation with staff side could not be held in the manner of a Raj durbar as quite a number of Associations especially representing the organised Group A services and the All India Service officers were also invited to the said meeting.  The staff side was assured of an independent hearing.  

Subsequently the sub-committee III (The Pension Committee had set up three sub committees to interact with various stake holders on different subjects)  under the Chairmanship of Ms. Vandana Sharma, Addl. Secretary of the Department of  Pension and Pensioners Welfare convened  a meeting on 10th February, 2017. The Sub- Committee was more concerned about the applicability of various provisions of the present rules to the NPS subscribers especially those which are punitive in character.  In the event of a Government servant being found guilty under the CCS (CCA) Rules, the Government is empowered to restrict, reduce or reject the Pension and other retirement benefits. Prior to the meeting, the sub Committee had asked for views on various issues to be discussed at the meeting. 

The official Side wanted similar rules in the case of NPS subscribers. The Staff Side had submitted a written Note in this regard.  The said Note has also been placed on the website.  In the meeting, the Staff Side had made it categorically clear that no such rules could be imposed on the NPS subscriber as the annuity which he purchases on the basis of the contribution made at the end of his service is the product of a financial transaction and cannot be unilaterally altered at the whims of the employer.   Once the contributions of  the employee and the employer is remitted to the investing agency, the employer ceases to be a stake holder any more in the scheme.  

The third meeting was held on 17th March, 2017.  The meeting was chaired by the Secretary Pension.  The said meeting was to specifically interact with the members of the Staff Side.  On behalf of the Staff side, the following comrades took part in the meeting. 

1.     Com. M.Raghavaiah (Leader, Staff Side)
2.     Com. Sivgopal Misra(Secretary Staff Side)
3.     Com. KKN.Kutty(Confederation)
4.     Com. C. Sreekumar(AIDEF)
5.     Com. Guman Singh and (NFIR)
6.     Com. Sreenivasan (INDWF)

 As indicated earlier, several Associations of Group A Officers had made their presentations. Some of the important points mentioned by them during the discussions were:

1) Discrimination between pre and post 2004 officials-

2) While Govt. determines the quantum of pension subscription   and makes it mandatory it refuses to guarantee a minimum return.

3) Atal Pension Yojana offers better and guaranteed benefit to the Subscribers.

4) The Government’s assurance that the employees under NPS will get annuity not less than the minimum pension under the defined benefit scheme and might even be more was  made on wrong assumption in as much as -

a) 100% of the corpus was taken for  computation of annuity  whereas as per the  scheme only  40%  of the pension wealth alone would b e available. 

b) Fund expenses are exorbitantly under- valued.

c) No benefit for the family the case of a Pensioner, who dies at an early age under NPS.

d) Annuity is not cost-indexed.

5) Two officers at the level of the Secretary to GOI retiring on the same day  in 2037( former recruited in 2003 and latter in 2004 )will have a huge differential in pension. The  2003 recruitee will have pension 3.25 times  of the annuity of the 2004 recruitee. Over a period of next 10 years i.e in 2047,(due to cost indexation) the 2003 recruitee will have pension 7.4 times of what  the 2004 NPS official receives as annuity.

6) In most of the countries where contributory pension scheme is in vogue, the Govt’s (employer) contribution is 25% of the salary while that of the employee is 10%

7)  The NPS Contribution do not enjoy the Tax benefits like PPF, EPF, GPF etc.

The Secretary Pension informed the members that the Committee’s mandate is only to make suggestions to streamline the NPS procedures and make the rules simple and transparent. The basic features will not therefore undergo any change. He concluded that neither the scheme would be  replaced or discarded, nor any guaranteed minimum pension  would be offered. as in both cases Govt. will have to  undertake financial obligations.  He clarified that the Sub Committees have been set up to expedite the work.

The staff Side in their presentation made out inter alia the following points:

a) The number of employees covered under NPS in increasing day by day and in a decade’s time, they might become significant segment of the Government personnel.

b) All those who are covered by the scheme are extremely critical and resent that their savings are channelled into private hands to help the corporate bodies to make enormous profits.

c)  There is no likelihood either now or in any time in future that NPS subscribers will be able to   purchase an annuity equivalent to what the pensioners under the Defined Benefit Scheme is entitled. The Government must honour its commitment made to this effect to the staff side in the National Council, when the NPS was introduced.

d)  The Committee in its report must at least   bring it to the notice of Government that the Staff Side of the JCM is of the firm view that the cosmetic changes in the scheme will not bring about any tangible benefit to the subscribers and the Government must as an interim measure guarantee the pension to NPS subscribers equivalent to what is provided for the personnel covered under the defined benefit scheme.

e)  The  Staff Side opined that the committee  will be well  within its term of reference to suggest.

(i) Cost-indexation of annuity as  the Contribution made by the subscribers and the Government as employer  is 10% of the salary-salary for this purpose being Basic Pay and Dearness allowance. In other words, in every six months contribution increases and therefore it is logical that the annuity is also raised every six months to keep  pace   with the rate of inflation. 

(ii)  Minimum guarantee is assured by many countries even under the contributory system of pension and the provision to the contrary in the PFRDA Act must be recommended to be removed. 

(iii) It is a welcome step that the Govt. has now decided to extend the benefit of family pension in the case of all NPS subscribers who die in harness. The family pension can therefore be assured at the prevailing rate  for all NPS subscribers, if necessary by appropriating a one-time  deduction from their pension wealth,  at their option, at the time of retirement. 

(iv) To introduce the GPF again as a voluntary option. 

(v) All NPS subscribers must be provided with a payment slip by the heads of offices  indicating the amount deducted, the amount contributed by the Govt. and the date on which the     sum has been made over the to the fund managers, irrespective of the communication the subscriber is entitled to get from the   PFRDA registry. 

(vi) No rules to be framed to link the pension benefit with disciplinary proceedings.

(vii) The present investment pattern prescribed must be reviewed for its viability periodically.

(viii) The Sub Committee which goes into the issue concerning framing rules may be asked to interact with the Staff Side once the draft rules are ready.

(ix) In so far as customer friendly procedures are concerned, the committee may look at the best international practices with a view to adopt and incorporate them.

It could be seen from the deliberations in the committee that nothing short of replacing NPS with Statutory   defined     Benefit Pension Scheme will bring about anything good for new recruitees. Our endeavour must be in that direction whereby sanctions are generated and compulsions  are felt by the Govt as early as possible.
   
K.K.N. Kutty
Member, Standing Committee
National  Council, JCM &
National President, Confederation

Source: http://confederationhq.blogspot.in/

Central Government expects its employees to work with full dedication, sincerity and diligence – Dr Jitendra Singh

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Several relaxations brought in GP Fund rules
In a major relief for government employees, Ministry of Personnel, Public Grievances and Pensions has announced several relaxations in General Provident Fund Rules, with liberalization and simplification, particularly relating to advances and withdrawals by the subscriber/ employee.

According to the Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh, the existing GP Fund (Central Service) Rules came into force way back in 1960 and even though certain amendments have been made from time to time to address the concerns raised, it was felt to be the need of the hour to bring in some more changes for the convenience of the Government employees. The liberalization in the provisions was essentially meant to bring in ease of procedures, especially for activities like house building, education of children etc., thus making the rules more employee-friendly.

Elaborating further, Dr Jitendra Singh stated that the requirement of documentary proof for withdrawing GP Fund has been done away with. As a result, a simple declaration by the subscriber / employee would suffice henceforth, he added. Similarly, the minimum time limit for sanction and payment of GP Fund withdrawal would not be more than 15 days and in case of an emergency like illness, etc., it could only be 7 days. At the same time, the limit of withdrawal also has been increased following which, now the withdrawal for housing can be up to 90% of the balance at credit and withdrawal for purchase of vehicle / car can be up to 3/4th of the balance at credit.

Considering the importance of education, the definition of education for the purpose of withdrawal of GP Fund has now been widened to include primary, secondary and higher education covering all streams and institutions. Not only this, GP Fund advance can now also be applied for travel and tourism related activities, he said.

Dr Jitendra Singh said, the Government expects its employees to work with full dedication, sincerity and diligence, but at the same time, it is also always seriously considering various means and provisions to provide them with a work-friendly environment and socio-economic stability, so that they may put in their best without any unnecessary distraction.

Source: PIB News

Calculation of DA/DR based on AICPIN only

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Calculation of DA/DR based on AICPIN only

“Calculation of Dearness Allowance and Dearness Relief for Central Government Employees and Pensioners based on the methodology prescribed by the recommendations of Central Pay Commission”

Dearness Allowance is issued twice a year and the Seventh Pay Commission has adopted the same calculation methods that were prescribed by the Sixth Pay Commission.(Click to read the recommendations of 7th CPC on Dearness Allowance)

The same series of the All-India Average Consumer Price Index Numbers for Industrial Workers (Base 2001=100) are used for the calculation of DA/DR to be continued. The 7th CPC recommendations are implemented from 1.1.2017 and no DA from 1.1.2017 to 1.7.2017. And from 1.7.2017, 2% DA calculated as per the same formula recommended by 6th CPC. And then now, same calculation with the Consumer Price Index, the figure of two percent was arrived.

Most of the Central Government employees feel that the enhancement of DA/DR is meager.

The Central Government had nothing to do with the Dearness Allowance issued to the Central Government employees in the past, which were as high as 10 percent. Similarly, the government is in no way connected with the current announcement of two percent DA/DR. (Click to view the DA Chart as per 5th, 6th and 7th CPC)

The same AICPIN (CPI IW BY2001=100) adopted for the calculation of Dearness Allowance to draw their pay in the pre-revised pay scale of 5th and 6th CPC. For 6th CPC, 4% Dearness Allowance was calculated on the basis of the same method. In other words, it will be expected to increase from 132 percent to 136.

The Dearness Allowance is calculated based on the changes in the prices of essential commodities in 75 cities and towns in India, over a period of six months. The monthly data, called the AICPIN, are released each month, by the Labour Bureau under the Ministry of Labour and Employment.

Central Government employees and Pensioners are not only getting the DA and DR, also employees working under Bank, CPSE etc,. The CPI(I-W) series are used for the calculation of DA for Bank Staff and IDA for CPSE employees. Almost the same enhancement of DA will adopt for the employees working in State Governments. Consumer Price Index will impact on the salaries and pension of more than 2 crore employees and pensioners directly.

Just watch the difference of DA amount between 6th and 7th CPC…


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