West Bengal and Tripura are the only two States that are yet to join the National Pension System (NPS). Yogesh Agarwal, Chairman of Pension Fund Regulatory and Development Authority, told reporters here that these States are yet to take a decision on this. The West Bengal Finance Minister’s response a year ago was that the Chief Minister would take a call on the issue, he said.
Since April 1, 2008, the Union Government had placed its new employees who joined service from or after January 1, 2004, under the NPS. It is a contributory pension system. Professional fund managers invest the contributions in debt or equity marketswith the subscriber’s choice.
For the States, it has been an option to migrate their new employees to NPS. So far, 28 States and five Union Territories have notified the NPS for their employees. Most of them have already signed agreements with the eight designated fund managers.
“In response to our proposal, the West Bengal has not formally responded,” said Agarwal.
“As a regulator, it would be improper to comment on the issue. If a State Government wants to subsidise its employee pension obligation entirely in future, it is the particular Government’s choice,” PFRDA Chairman added. However, it has been found to be economically unsustainable, he explained.
He further said as the capital required for running a pension fund is disproportionately small, FDI or its limit — whether 23 per cent or 49 per cent — was not material to the development of pension system in the country.