Union Finance Minister Nirmala Sitharaman during a press conference on the Union Budget 2023-24, in Jaipur on February 20, 2023. | Photo credit: PTI

On February 20, the central government clarified again that funds deposited for the National Pension Scheme (NPS) cannot be remitted to state governments in accordance with applicable laws.

Finance Minister Nirmala Sitharaman and Finance Secretary Vivek Joshi said that if a state expects funds deposited for the NPS to be returned to it, this is impossible.

Citing the recent crash in shares of Adani Group companies, Rajasthan Chief Minister Ashok Gehlot previously said that state government employees cannot be left at the mercy of the equity market where government funds National Pension Scheme (NPS) are invested.

He had also urged the Center to donate state government employee funds deposited in the NPS and said the state would go to the Supreme Court if the funds are not transferred to the old pension plan (OPS ) implemented by the state government.

“If a state expects funds deposited with EPFO ​​to be returned to the states. If that is the expectation, then no. Employees are entitled to the money. Money deposited earns interest and it should be clear that the money comes into the hands of (employees) after retirement. The deposited money will come into the hands of the government, it’s impossible,” Ms Sitharaman told reporters.

She was here today to participate in a post-budget discussion on various stakeholders.

Finance Secretary Joshi said it is not a very good trend that some states have adopted the old pension scheme (OPS) and other states are also demanding.

“In this regard, I would like to say that this trend is not very good and only the state governments are “deferring” their responsibilities. Employees feel benefited or not, it is also a question to see. concerned about the fact that the state governments are demanding their share, I would like to say that the law is very clear. The state governments cannot get this money,” Mr. Joshi said.

He said the money from the new pension scheme is tied to the employees and is in an agreement between the employee and the NPS Trust. If the employee resigns before the deadline, before reaching retirement age, the rules are different.

According to this, an annuity of 80% and a lump sum of 20% are available.

“As far as the states think we’ll come back, I think that’s not possible under the existing rules,” he said.