We submit this petition to bring to your kind notice certain aspects of the re-introduced PFRDA Bill which will have an extremely adverse impact on the pension and retirement benefits of the Government employees. We may also state in this connection that the contributory pension scheme will be a drain on the exchequer.
The guiding principle adopted in determining the pay package of civil servants is to spread out the wage compensation over a long period of time because of which the wages during the work tenure is low to enable pension payment on retirement. This makes the pension a ”deferred wage”, which the Supreme Court has upheld as such in their landmark judgment in the case of D.S. Nakara Vs. Union of India. As the bill does not provide implicit or explicit assurance of a minimum pension except marked based guarantee, the civil servant even after contributing huge sums to pension fund may end up with no annuity if the invested company become bankrupt or the equity market crashes. Moreover the annuity which would be the pension under the new scheme being not cost indexed will make it difficult for the pensions to make the both ends meet.
The Committee set up by the 6th CPC has concluded that the new contributory pension scheme will increase the outflow from the exchequer from Rs. 14,284 Crores to Rs. 57088 Crores by 2038. The Committee has also observed that the pension liability of the Government which was 0.5% of the GDP in 2004-05 under the defined benefit scheme is likely to decline if the same is not replaced by the contributory pension scheme as envisaged in the PFRDA bill. The Committee has ultimately recommended that the existing “Pay as you go” pension which is presently in vogue will be ideal and may be continued.
Since the new scheme is neither in the interest of the country as it increases the outflow on account of pension liability nor to the Civil Servants for it does not guarantee a minimum pension, we appeal to you kindly cause withdrawal of the PFRDA Bill from the Parliament immediately.