September 4, 2013
Saugata Roy speaks on Pension Fund Bill
Madam, on behalf of our party we oppose the Pension Fund Regulatory and Development Authority Bill. Madam, since before Independence the main attraction of a government job either in the Central or the State Government was that it ensured a pension which people get till the end of their life. And in Central Government, the spouse could also have the pension money till the end of his or her life.
This Government, in 2004 started a new pension system. What was the new pension system? The new pension system said that people could invest in a pension fund and there could be several pension funds in the country of which one would be a Government company. This Bill has been pending since 2005. It was sent to the Standing Committee and the Standing Committee sent it back. The Government again brought amendments to the Bill in 2009, but so far the Bill was not passed.
It is all right if the Finance Minister opens a Pension Fund for the people who are not Central or State Government employees. Let the people in the unorganised sector, those working in the private companies invest or contribute in a pension fund and then you do what you want to do with it. You play the market. But as far as the Government employees are concerned, their security should be ensured and the Government should only invest in the Government security. Maybe the return will be less but let them at least be given a social security for the future. What has the Minister done? He has gone ahead. He is setting up a Pension Fund Regulation and Development Authority. It will have a Chairman; it will have Members. It will have powers to impose service charges. It will have power to impose penalties. It will also have the option of investing in the stock market, in the share market. Now, basically if you play share market with people’s social security money, it is subject to market risks. When somebody invests in a mutual fund, it is always written that the mutual fund is subject to market risks. So, you are subjecting the social security component to the market risk. This is an idea to bring more money, the savings of people, into the market so that the share market can move. I know that the option is there. If somebody wants, it can be an individual based pension fund. So, if the subscriber wants he can decide that he shall only invest in Government securities. That freedom is given to him but what the pension funds will do is they will lure the people with greater returns and let them invest in pension fund where the return will be high. If the market crashes, like it does in America, what happens to the future of this scheme?
After having set up a pension fund the Minister has set up an elaborate structure. I have nothing to say. If the Government insists it will lead this elaborate structure. It has also set up Advisory Committees on the pension funds. It has also allowed a ‘person in place’ point. Even bank branches will be able to collect deposits in the Pension Fund. I had said earlier that this pension fund idea takes away the concept of assured future for Government employees and that is why we are opposing this Bill.
In an amendment the Finance Minister is allowing 26 per cent FDI into the pension fund. Madam, it is not clear to me as to what trade skill is required in investing money in the pension fund. Why do you want the foreign companies to come into our Pension Fund area and what benefit does it have? On the one hand the Bill says that you cannot invest pension fund abroad and on the other you say that you can have FDI. We oppose FDI up to 26 per cent in pension money. We have urged the Finance Minister to have a pension fund for non-Government employees but please assure.Please assure the future of Central and State Government employees instead of creating a huge mechanism to promote your pension fund and bring poor man’s savings into the market.
Madam, the House must be in order. We have spoken in this din but the Bill should not be passed in a din. That is our point. Let there be order. Such an important Bill affecting the lives and future of millions of people should not be passed in a din, without proper discussion in the House and without discussion on the various amendments which the Members of this House have put forward.
