2006 will not usher in new pension system: Swarup / Dec 23, 2005 / The Financial Express

From Indiapensions

2006 will not usher in new pension system: Swarup

MAHUA VENKATESH

NEW DELHI: The controversial new pension system (NPS) would not be implemented before 2007. The reason: the government has failed to take up the crucial Bill in Parliament during its current session.

"To put in place the new scheme, we would take at least 8-9 months and, therefore, it would not be possible to implement it before 2007, even if the Bill gets Parliament assent in the Budget session," D Swarup, Pension Fund Regulatory and Development Authority, told FE.

All central government employees who have joined the services on January 1, 2004 or after that would be covered by the new scheme.

The Centre and the Left parties are yet to reach a consensus on the new pension system, which marks a shift from the defined benefit to defined contribution scheme. Though several rounds of talks have already been held between finance minister P Chidambaram and leaders of the Left parties, there has been no concrete agreement on the issue.

However, there is now pressure on the finance ministry to resolve the core issue, which targets not just central government employees but also those working in the unorganised sector. Currently, there is no pension scheme for the unorganised sector.

It is understood that Prime Minister Manmohan Singh has also held a meeting with the leaders of the Left parties to sort out the contentious issue. At present, with 15 states already adopting the new pension scheme, there are about two lakh employees under the new pension scheme.