In UP, Will Promises to Restore Old Pension Scheme Sway Government Employees?

Though sections of government employees have been opposing the National Pension Scheme 15 years, the issue has come into the political discussion ahead of the assembly elections.

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Lucknow: The Samajwadi Party’s (SP) pledge to restore the old pension system (OPS) if voted to power is igniting a fresh debate on the retirement benefits for the more than 12 lakh Uttar Pradesh government employees, who may have a significant influence on the assembly elections.

Soon after the election notification was issued in January, the SP announced its intent to reimplement the OPS by withdrawing the market-linked National Pension Scheme (NPS).

The announcement has buoyed state government employees who have been protesting against the NPS since it was implemented 15 years ago.

The NPS was introduced by the Union government in 2004 and then implemented by the Uttar Pradesh government on April 1, 2005. It is a contribution-based pension system. Under the old system, the pension was fixed at 50% of the last basic salary drawn by an employee, along with other benefits and hikes. The employees also receive an assured amount, regardless of how much they contributed to her pension during her working life.

Under the NPS, the pension value depends on the corpus amount saved by the employee at the time of retirement and is also subject to a rise or fall in investment value. In the NPS, the pension benefit is determined by factors such as the number of contributions made, the age of the member, the type of investment, and the income drawn from that investment.

In November 2021, tens of thousands of government employees and teachers gathered in Lucknow to protest against the Adityanath government for the restoration of OPS. They likened the NPS to “gambling” and called it “national problem scheme”.

Despite the mega protest in the state capital, the government did pay much attention and put the issue on the back burner. This decision may now prove costly during the election season.

The top brass of the ruling Bharatiya Janata Party (BJP) was stunned by the SP’s pledge, which could influence the voting behaviour of 12-14 lakh voters.

Following the footprints of the SP, Mayawati, the Bahujan Samaj Party chief, also vowed to restore the scheme for government employees and teachers in UP if voted to power. She made the announcement after the first phase of the elections at a rally in the Auraiya district.

Congress also jumped into the game with the promise of a “mid-way” solution between OPS and NPS.

To control the damage, on January 28, the Yogi Adityanath government, which had been ignoring the pension issue since 2017, called a review meeting through its chief secretary Durga Shanker Mishra.

During the review meeting, chief secretary Mishra tried to convince the employees that the NPS was more beneficial than the OPS. But the meeting failed as the employee unions rejected all the arguments in favour of the NPS.

According to the state employees, the government tried to convince them that the amount received post-retirement under the NPS was much higher and more beneficial than what could be obtained by investing the money in any other saving scheme. The meeting was attended by the leaders of various employee unions. Employee leaders felt that the meeting was an indication that the BJP still favoured the market-linked NPS.

Polling officials collect election materials at a distribution centre on the eve of the second phase of the Uttar Pradesh assembly elections, in Moradabad, February 13, 2022. Photo: PTI

’15 years of struggle’

Kamlesh Mishra, the president of UP Rajya Karmachari Mahasangh, an umbrella body of employees unions, said, “All the state government employees will support the political forces that are vocal for the restoration of the OPS.” He asked if the NPS is more beneficial than the OPS, then why did the government not implement it for the pensions of MLAs and ministers.

The Wire contacted the employee unions for their take. They say that the OPS is their pending demand, and after a 15-year struggle, the issue has come into the political discussion ahead of the assembly elections.

Employees of the power department are enthusiastic about the promise to restore the OPS. Shailendra Dubey of the All India Power Engineers Federation said it was a long pending demand of the UP government employees, who have been protesting against the NPS, which is also subject to the rise or fall of the market. Dubey anticipated that retired employees also stand with the working employees on the issue of the OPS, and this might affect their voting behaviour.

Aseef Siddiqi, an employee leader in the Public Works Department (PWD), said OPS is questioning the social security of more than a million government employees. “We chose to work in the government sector to secure our post-retirement, but without an assured pension, how do we survive post-retirement?” says Siddiqi.

Sumeet Patel of the All India State Employees Federation said recently retired government employees are not able to even pay their monthly power bills with the pension they are getting under the NPS. “Is it not an injustice to us? If any employee retires with the OPS, he will get around Rs 25,000 to Rs 50,000 per month as pension, while the same government employee retiring under the NPS will receive hardly Rs 1,500-Rs 3,500 per month,” Patel said.

Pradeep Sharma, associate professor at the Shia Degree College of Lucknow University, opined that the Yogi government has shown a cold shoulder to restoring the OPS and now its impact would be reflected in the electoral outcome. He says, “The OPS issue has now become a movement in the past few years as the majority of retiring employees have been receiving pensions under the NPS and its disadvantages have become apparent to them.” Earlier, the retired employees were covered under OPS as they were appointed before 2005.

Political analysts say the OPS issue is influencing government employees as well as aspirants preparing for government jobs. Nagendra Pratap, a senior political commentator, says, “The OPS is social security for the employees of the organised sector, so it is more significant for them than any other issue.” Many parties have promised the OPS, but only the party with the best chance of winning will benefit from it.