The Ministry of Finance has set up a committee to review the pension system for government employees. The committee aims to improve the pension benefits of the beneficiaries under the National Pension System (NPS). The committee has been constituted under the leadership of Finance Secretary TV Somanathan. It will suggest whether any changes are necessary for the existing structure of the NPS applicable to government employees. The committee will suggest modifications to improve the pensionary benefits of government employees covered under NPS, keeping in view the fiscal implications and the overall budgetary impact.
The decision to form the panel comes against the backdrop of some states implementing an old pension system with an assured pension as a share of the last drawn salary. Some states have promised the implementation of the old pension scheme owing to populist measures. However, the imposition of the old pension scheme may burden their exchequer. In the panel committee, the finance ministry has inducted secretaries of the Department of Personnel and Training, a Special Secretary in the Department of Expenditure and a Chairman of the Pension Fund Regulatory & Development Authority (PFRDA). The decision is important ahead of the general elections in 2024.