Punjab’s NPS payment short by ₹122.5 crore: CAG
Report shows ₹183.37 crore interest has been incurred by the state government due delay in release of payment.
The Comptroller and Auditor General (CAG) has flagged a shortfall of ₹122.5 crore in contributions and delay in payment to the pension fund by the Punjab government over the years under the National Pension System (NPS), saying this would impact the pensionary yield of the employees.
The state government has incurred an “avoidable interest” of ₹183.37 crore due delay in release of its contribution and transfer to the pension fund, according to the federal auditor’s report for the financial year that ended on March 31, 2023. It said the state government has created interest liability on the amount not transferred to the National Securities Depository Limited (NSDL), which acts as the central recordkeeping agency for the NPS, and used the funds that belong to its employees and created uncertainty in respect of benefits due to the affected employees.
According to the norms, the delayed transfer of NPS funds attracts interest at the corresponding interest rates applicable to the general provident fund subscribers. The CAG report, which analysed contributions made by the state government and its employees and fund transfers since the launch of the NPS in 2004, said that during the 2008-2023 period, against total receipts of ₹14,694.5 crore, including the employees’ share, government contribution and interest liability, ₹14,572 crore (99%) was transferred to the pension funds, leaving a balance of ₹122.5 crore. The funds were not transferred to the fund managers for want of complete particulars of the employees, said the report released last week.
A finance department official said the short transfer of funds and interest was a deferred liability and had nothing to do with the present government. In the financial year 2022-23, the state government transferred ₹2,926 crore against total receipts of ₹2,900 crore, including the employees’ share of ₹1,200 crore and government contribution of ₹1,700 crore, making excess payment ₹26 crore to reduce the shortfall,” said the official who did not want to be named.
The Punjab government implemented the NPS, a defined contribution scheme where employees give 10% of their basic pay and dearness allowance and the government contribute 14%, in 2004. It, however, started deducting the contribution from employees largely from April 2008, said the report. The arrears of employees’ share for the period from January 2004 to March 2008 were deducted in 36 instalments from April 2008 to March 2011, but the money was transferred to the pension fund from 2010-11 onwards. Over 2 lakh government employees in the state are covered under the scheme.