Left leaders protest move to operate new pension scheme

New Delhi, May 20 (UNI) Taking strong exception to the Finance Ministry's approval of sponsoring a Pension Fund under the new Pension Scheme, top leaders of the left parties today dashed off a letter to Prime Minister Manmohan Singh, requesting him to put on hold the entire process till a final decision is taken on the contentious issue.

In their letter, the leaders pointed out that the Interim Pension Fund Regulatory and Development Authority (PFRDA) had put out an invitation for Expressions of Interest for sponsoring a Pension Fund under the new Pension Scheme.

''We fail to understand how the Finance Minister has cleared this step when he is fully aware of our strong and continuing objections.

The Central and state government employees' organisations have also expressed their opposition,'' they said.

The letter was signed by CPM General Secretary Prakash Karat, CPI General Secretary A B Bardhan, All India Forward Bloc General Secretary Debabrata Biswas and RSP Secretary Abani Roy.

Pointing out that the Left parties were stoutly opposed to the PFRDA Bill, they said several rounds of discussions had been held on the matter in the UPA-Left Coordination Committee meetings.

The left leaders further pointed out that the bill had not been taken up for adoption, pending a decision on the matter.

''It is, therefore, surprising that the PFRDA has proceeded to operationalise the pension scheme. In the name of an interim step, some of the objectionable features of the bill are going to be put in place. We wish to register our strong disapproval of this move,'' they said.

Urging the Prime Minister to put on hold the process of appointing pension fund managers initiated by the PFRDA, they said the funds could instead be placed with the Employees Provident Fund Organisation ''till a final decision is taken on the new pension scheme''.

Under the scheme, the PFRDA is to appoint professional Pension Fund Managers (PFMs) who will invest the pension money of employees in government bonds, corporate bonds and partly in equities. PFMs will also charge a fee for this service to the members.

Initially, the PFRDA is to issue six licenses. PFMs are expected to offer three kinds of products--safe, balanced and growth products.

Under the growth scheme, money will be invested mainly in equities and the rest in government and corporate bonds. Returns are not specified under any schemes. Member can switch from one scheme to another at any time. A member is free to choose and invest through more than one PFM.

However, Left parties and employees organisations are up in arms against the government's move to divert part of the pension funds in stock markets, saying employees' hard-earned money cannot be left at the mercy of market forces.

UNI