The government has taken a big step in the midst of the debate about the new and old pension system in many states of the country. The Finance Ministry on Thursday constituted a committee headed by Finance Secretary TV Somanathan to review the pension system of government employees. The committee will suggest whether any changes are required in the existing structure of the National Pension System (NPS) applicable to government employees.

The committee will suggest modifications with a view to improve the pensionary benefits of government employees covered under NPS, keeping in view the fiscal implications and the overall budgetary impact. The committee, headed by Somanathan, will have Secretary, Department of Personnel and Training (DoPT), Special Secretary, Department of Expenditure and Chairman, Pension Fund Regulatory and Development Authority (PFRDA) as members.

Finance Minister Nirmala Sitharaman had last month said that a committee headed by the finance secretary would look into pension related issues under NPS for government employees. The announcement comes in the backdrop of several non-BJP states reviving the old pension scheme (OPS) and employees’ organizations in some other states demanding the same.

These states have implemented the old pension scheme

The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have requested to return the accumulated funds under NPS while notifying the Center about their decision to restore the old pension scheme. The finance ministry had told Parliament last year that it was not considering any proposal to restore OPS in respect of central government employees recruited after January 1, 2004.

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