“There was no assurance that all nodal offices and 100% of eligible employees were covered under NPS, even after 15 years of implementation,” the CAG said in its performance audit report of the government pension scheme tabled in Parliament on Wednesday.
Further, delays need to be penalised and compensation should be effected to avoid any loss to the subscriber, it added.
It also recommended that rules regarding the service conditions and retirement benefits of the NPS should be finalised, noting that this was pending since the scheme’s implementation in 2004.
Regarding legacy contributions not remitted to the Trustee Bank, the CAG said the government must identify all such cases and ensure they are transferred along with due interest and compensation to prevent loss to the subscribers.
The report highlighted that the Pension Fund Regulatory and Development Authority (PFRDA) was not aware of the quantum of legacy amounts to be transferred to the Trustee Bank for offices of the state and central autonomous bodies.
The report also suggested that the Department of Financial Services should come out with a minimum replacement rate taking into account annuity rates, interest rates and increased longevity.
The replacement rate is the percentage of a worker’s pre-retirement income that is paid out by a pension program upon retirement.
It also recommended that the government should take immediate steps to provide a ‘Minimum Assured Return’ to subscribers in line with the PFRDA Act.