The State Cabinet on Wednesday gave green signal for setting up a three-member committee to re-examine the contributory pension scheme and give recommendations on the implications of withdrawing the scheme as promised in the election manifesto of the Left Democratic Front (LDF).
The committee comprises former district judge S. Sathish Chandrababu as chairman, former Additional Chief Secretary P. Marapandian and Director of Gulathi Institute of Finance and Taxation D. Narayana as members. The contributory pension scheme was introduced by the previous United Democratic Front (UDF) government and came into effect on April 1, 2013, for all employees joining government service from that date.
The committee’s terms of reference are indicative of the government’s thinking on the scheme. The committee has been asked to look into the legal and financial impact while scrapping it, its effect on the Finance Commission’s norms and the fiscal consolidation path. The committee will study in detail the burden of financial commitments under the agreements signed by the State government with the National Pension System Trust and National Securities Depository Limited.
The committee will also give its recommendations on how to deal with the contributions made by the employees and government’s contribution till date, the legal status of benefits enjoyed by those who joined the contributory scheme but have since retired in the event of the government restoring statutory pension scheme.
The committee has also been tasked to give suggestions on making the contributory pension scheme attractive in event of any hurdles in re-examining its implementation. The committee is likely to be asked to submit its report within six months.