People's Democracy

‘Appointment Of Pension-Fund Managers Illegal’

CITU, AISGEF Condemn Govt’s Unauthorised Moves

THE CITU denounced the move of the UPA government to drastically alter the pension system of the government employees as per the Pension Fund Regulatory Authority (PFRDA) Bill –– which has so far not got the approval of parliament. This amounts to hoodwinking the parliament, asserted the CITU secretariat in a statement released on July 21, 2007.

Pointing out that the related ordinance had also lapsed long back, the CITU decried the central government for indulging in illegitimate actions in the matter of crucial social security rights of the government employees.

The PFRDA Bill is designed to convert the pension system of the government employees from ‘defined benefit’ to ‘defined contribution’ and making the pension quantum of the employees dependent on the market forces. The Bill also envisages the pension fund accumulations to be invested in the stock market through pension-fund managers to be appointed by PFRDA.

All the trade unions, including all government employees organisations opposed this Bill and the Left parties clearly conveyed their opposition to this disastrous exercise of the UPA government, following which the PFRDA Bill could not yet be passed in the parliament.

The constitution of the Pension Fund Regulatory and Development Authority (PFRDA) by the government was in itself an unauthorised move, stated CITU. And now it has gone a step ahead in appointing the State Bank of India, UTI Asset Management Company Private Limited and Life Insurance Corporation of India as sponsors of Pension Funds under new pension system. “The appointment of public sector entities as sponsors of the Pension Funds cannot give any solace as the same does not change the provision under the so-called new pension system of making the pensionary benefit of the employees dependent on the uncertainty of the market forces replacing the existing guaranteed benefit defined pension. Moreover, as the press release of the finance ministry dated July 20, 2007 indicates, the deployment of the pension funds accumulation in the stock market even by these newly appointed sponsors from the public sector entities cannot be ruled out. The entire moves of the government – right from the constitution of PFRDA, appointment of sponsors of Pension Fund under the new pension system and the New Pension System itself – totally lack legitimacy exposing the disastrous design of the government to push through so called pension reforms hoodwinking the parliament” stated the CITU.

The CITU demanded upon the UPA government to desist from such anti-employee moves, scrap the PFRDA along with the so-called new pension system and cancel the appointment of sponsors as all these actions are illegitimate and do not have any statutory backing in the face of pendancy of the PFRDA Bill in the parliament.

AISGEF OPPOSITION

The All India State Government Employees Federation (AISGEF) has also strongly opposed the UPA government’s moves to appoint Pension Fund Managers. It has termed it an “unacceptable exercise by so-called PFRDA”.

AISGEF general secretary Sukomal Sen wrote to prime minister Dr Manmohan Singh on this issue on July 23, 2007. The following is the text of the letter:

“It is extremely strange that so-called PFRDA (Pension Fund Regulatory & Development Authority), the constitution of which requires parliamentary sanction (with the PFRDA Bill pending so far and the ordinance having already lapsed), has appointed State Bank of India, Life Insurance Corporation of India and UTI Asset Management Company Pvt Ltd as Pension Fund Managers for dealing with the huge amount of the pension contribution of the government employees.

We fail to understand, when PFRDA itself is not yet a legal entity, how that body can appoint Fund Managers to handle the enormous amount of money collected through forced contribution of the employees who are recruited from and after 1.1. 2004.

This is totally unacceptable as the total exercise of introducing New Pension Scheme and allowing so-called PFRDA to function, as if it is a legally constituted body. It cannot be forgotten that the parliament of India did not pass any Bill in this regard.

So, the entire exercise is undemocratic, unprecedented and full of illegality. It appears to us that the government of India is bent upon to impose the New Pension Scheme on the employees, by hook or crook simply by executive fiat without caring for any democratic and parliamentary norms.

We would like to point out to you that about 1.2 crore government sector employees of the country, (incidentally, the All India State Govt Employees’ Federation alone represent about one crore of government employees, teachers and State PSU employees), who are enjoying the benefit of present Pension Scheme are determined to oppose this anti-worker New Pension Scheme, whatever strong may be the pressure of World Bank & IMF and the intention of the government to implement it.

We, therefore, request you to please give deeper consideration to the matter and see that this type of coercion on the unwilling employees to foist the New Pension Scheme is stopped forthwith.

We would again point out to you that by such action the government would only push the employees , whose anger against the New Pension Scheme is fast getting intensified, to further nationwide action leading to a possible dead-lock in the administration.

We earnestly hope that you will kindly see so that all such efforts deeply harming the employees’ interests are withdrawn and normalcy in the administration is not disturbed. (INN)