The National Securities Depository Limited is likely to get the nod for maintaining the pension records of new government recruits.
At present, pension records of government employees are maintained by Pay and Accounts Offices all over the country.
They will be gradually replaced by the NSDL, which will henceforth act as the first tier of the pension system. NSDL will also be responsible for monthly payments to pensioners.
The appointment of NSDL to run the computerised pension system will imply that the government will soon have to cut its civil accounts staff, which runs the accounts.
This is in line with the recommendations of the high-powered committee set up by the finance ministry in 2001.
It had said that a separate mechanism needs to be devised to run the new retirement scheme.
The panel had argued that not only was it impossible to set up a parallel structure within the government to handle the scheme, it was also impossible to modify the PAO set-up. The government is yet to set a date for introducing the new pension scheme.
Under the scheme, employees will be expected to contribute 10 per cent of their monthly salary to the pension fund and the government will make a matching contribution.
Any additional contribution by employees will be hived off as a separate fund without any matching contribution from the government.
Employees recruited under this new scheme will not be eligible to join the government provident fund scheme or the corresponding family pension scheme.
Sources, however, said the government will have to ensure that the projected benefits from the fund manager-driven pension system is equal to that drawn by existing government employees. Or else, there is a possibility that it may get mired in litigation.
The Centre will thus have to alter a large number of recruitment rules for all grades of government service. A new pension regulator will be set up by April through a government notification.
Subsequently, there will be a legislation to give statutory powers to the body. The regulator is expected to have a broadly similar mandate to that of the insurance regulator.
