New Pension Scheme for Karnataka Govt’s 65,000 employees
From Our Special Correspondent
Daijiworld Media Network

Bangalore, Jan 20: As many as 65,000 employees of Karnataka government would be covered by the new pension scheme, which had been introduced by the state government under the Defined Contribution Pension Scheme, who had joined service from April 1, 2006.

The state government signed two agreements with the New Pension System Trust (NPST) and National Securities Depository Ltd, thereby becoming the 14th state in the country to join the NPS Trust on Wednesday.

Apart from the 65,000 government employees, who will be covered initially, another 15,000 to 20,000 freshly recruited employees would be joining the scheme every year.

Karnataka Chief Minister B S Yeddyurappa, who briefed reporters after the agreements were signed, explained that the government decided to join the NPST following the recommendations of the State's 5th Pay Commission and expressed confidence that employees would immensely benefit from it.

The state government has adopted the NPC architecture set and regulated by Pension Fund Regulatory and Development Authority  (PFRDA) and the supervision of the scheme functioning and performance of all intermediates was done by the NPS Trust under the overall guidance and supervision of PFRDA.

The Managing Trustee and CEO of the NPS Trust, N R Rayulu, who spoke on the occasion, said 23 states have agreed to join the scheme and already another 13 states have brought their employees under its ambit.

He explained that more than 6.50 lakh employees of the Government of India and other State Governments have joined the scheme including Union Territories.

Rayulu said the trust is operating fund worth over Rs 3,750 crore. ``The
total strength of the members would reach one million within a few months,’’ he said.

The National Securities Depository Ltd (NSDL) has been  appointed as the Central Record Keeping Agency (CRA) and update the entire records of the NPS, including the contributions, investments, balances and annuity for each employee.

Funds would be invested in Government Bonds, Securities and selected Equities through Government of India approved three Pension Fund Managers (PFM), SBI  Pension Fund, UTI Retirement SOlutions and LIC Pension Fund.

In the first year of its introduction, he said the Pension Fund had recorded a growth of 14.5 % followed by 12.8 % in 2009. ``There is also proposal to widen the other asset
classes including Gold and a decision would be taken shortly on the matter,’’ he said.

Karnataka’s  Additional Chief Secretary, Finance Department, M R Sreenivasa Murthy, and Gagan Rai for NSDL and Rayulu for NPS Trust signed the agreements in the presence of the chief minister.