People's Democracy

Oppose Pension Scheme Privatisation

THE AISGEF has opposed the announcement made by the union finance minister that the union cabinet approved a proposal on November 11 to establish an independent Pension Fund Regulatory and Development Authority (PFRDA) paving the way for privatising pension scheme of the government employees and other categories of workers.

The system is mandatory for new recruitment to the central government services, where the monthly contribution of 10 per cent of the salary is to paid by the employees and equal amount matched by the government.

The Regulatory building will also be empowered to set up a Central Record Keeping Agency (CRA), the nodal point which would handle the new ‘defined contribution scheme’. The cabinet has decided to bring a legislation in the next winter session of the parliament to give a legislative sanction to this privatised scheme.

Sukomal Sen, general secretary of the AISGEF in a statement issued from Kolkata on November 13 stated that by this legislation the pension funds will be invested in the share market, and as usual the amount of ‘pension’, if any, will depend upon the mercy of the share market with its usual fluctuations and in the process private players will reap enough profits. "In fact this is a World Bank–IMF scheme, being already tried in western countries, to boost the share market. Now it has been brought to India"

The union finance minister has said that the legislature will empower the pension regulator to appoint Pension Fund Managers (PFMs) and according to a high official of the ministry "there should be a limited number of managers of which one will belong to the public sector." It means the private sector players will be the core of the pension fund managers with only one public sector manager, pointed out Sukomal Sen. He said that it is reported that the ministry is also considering hundred per cent FDI for the scheme which means handing over the scheme to the MNCs.

The AISGEF expressed apprehension that this scheme will not only be made applicable for the central government employees, but to various state government employees also. It pointed out that already this scheme was announced for the state employees and teachers in Andhra Pradesh.

The AISGEF criticised the UPA government for continuing the anti-worker policies of the NDA government. It said by this move the government employees will be deprived of the present system of pension scheme and other workers will also suffer.

The AISGEF urged upon the government employees and workers to build up a countrywide movement to compel the government to withdraw the obnoxious scheme.