Government may be trying to get non resident Indians to opt for National Pension Scheme, but a sizable section of current NPS subscribers have raised issues with the fee structure of NPS.
Expressing “shock and disappointment” over the National Pension System Trust’s move to start recovering 0.01 per cent as fee from assets under management from November 1, the Indian Railways union – National Federation of Indian Railwaymen – has reiterated its earlier demand to exempt railway officials from the NPS.
“This is provocative and arbitrary decision has generated deep sense of disappointment and anger among railway employees,” National Federation of Indian Railwaymen (NFIR) stated in a release.
The Government of India had introduced NPS applicable to the Central government employees appointed on or after January 1, 2004 -- a defined contribution scheme but not a defined-benefit scheme which existed for government employees before January 1, 2004.
Under the NPS 10 per cent of the pay of each employee is deducted from his/her salary every month and equal amount is contributed by the employer and credited to the NPS Trust controlled by the PFRDA. Incidentally, the defence and paramilitary forces continue to have a defined benefit pension scheme.
NFIR stated that on March 29, 2014, the then Minister of Railways Mallikarjun Kharge had sent a communication to the Finance Minister explaining case and justifying that the Railways deserves to be exempted from NPS. Unfortunately, there has been no positive decision from the Government till now, NFIR stated in the release.
In this context, NFIR has written to Suresh Prabhu, Minister of Railways reminding of the letter of predecessor to take the railway employees out of the purview of NPS.