Private pension managers: Left protests to PM

The Left parties and the UPA government appear to be headed for a fresh round of conflict on pension reforms: the Left has said efforts to bring...

The Left parties and the UPA government appear to be headed for a fresh round of conflict on pension reforms: the Left has said efforts to bring in private parties as fund managers should be put on hold, and pending final decision on the New Pension Scheme, the funds should remain with the Employees’ Provident Fund Organisation (EPFO).

The Left parties’ letter to Prime Minister Manmohan Singh said that while the pension fund regulatory bill was yet to be adopted, the PFRDA was going ahead with some of the bill’s objectionable features in the guise of interim steps.

Last week, a PFRDA notification had invited bids from fund managers for taking charge of funds of government employees already under the aegis of the New Pension Scheme (NPS). The notification allowed prospective fund managers to have a foreign partner with up to 26 per cent equity, as allowed in the insurance sector.

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“We fail to understand how the Finance Minister has cleared this step, when he is fully aware of our strong and continuing objections,” said the letter from CPM general secretary Prakash Karat, CPI general secretary A.B. Bardhan, Forward Bloc general secretary Debabrata Biswas, and RSP secretary Abani Roy.

The matter was discussed at a meeting of Left parties after nominations for the presidential polls, and they decided to lodge a formal protest.

The Left contends that PSUs alone should be allowed to manage pension funds.

Even though the decision to appoint fund managers for the idling NPS funds of about Rs 2,000 crore was taken after a meeting held by the Prime Minister and Chidambaram with state Chief Ministers, the Left parties have told Singh that Central and state government employees’ organisations have also expressed their opposition.

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At last count, 19 states had moved their employees to the New Pension Scheme. “As you are aware, the Left parties have been opposed to PFRDA Bill. We have had a number of rounds of discussions on the matter in the UPA Government-Left Coordination meeting. It is, therefore, surprising that the PFRDA has proceeded to operationalise the pension scheme,” the Left leaders said in the letter to Singh.