Unions representing Group B and Group C workers have complained to the cabinet secretary that the National Pension Scheme is a nightmare for retirees.
The Old Pension Scheme (OPS) has been requested to be reinstated by a federation of unions representing Union government employees in a letter to the cabinet secretary. According to The Hindu, they said that the National Pension System (NPS) is a catastrophe for retirees.
NPS workers contribute 10% of their pay per month for their whole service, yet their pension is far lower than OPS workers’. “The pension under NPS stays unchanged and there is no Dearness Relief to replace the price rise /inflation as offered in the OPS,” states the letter signed by the Joint Consultative Machinery, an umbrella union for Group B and Group C workers.
It was reported by The Hindu that the letter also provided specific examples of government personnel who have been deprived of their pension benefits after being transferred to the NPS. In one extreme case, a retired officer from the defence establishment received only 15% of the assured pension he would have had under the OPS despite having served for over 13 years.
The Hindu reports that an official earning $30,500 a year in base salary received a monthly pension of $2,417 under the NPS, compared to the $15,250 he would have received under the Old Pension Scheme (OPS).
NPS has been in place for 18 years now. Workers hired on or after January 1, 2004, have begun leaving their positions in the workforce. The meagre pension they are receiving today proves that NPS is a bad deal for retirees in their later years, as the letter proceeds to explain.