Kerala Government Defaults on NPS Payments, Leading to Employee Financial Crisis

The Kerala Government has defaulted on its monthly payments to the National Pension System (NPS), resulting in a significant shortfall in the accounts of Kerala State Road Transport Corporation (KSRTC) employees. This non-payment amounts to Rs 300 Crore, covering both employee deductions and the management’s contributions under the Contributory Pension Scheme.

Typically, each employee’s NPS account should reflect between Rs 10 and Rs 12 lakh, depending on their contributions. However, due to the government’s financial constraints, these accounts currently show balances ranging from Rs 6,000 to Rs 2 lakh only.

The financial crisis prompted the government to halt payments to the NPS Trust, diverting these funds instead to cover KSRTC’s daily operational expenses. Consequently, retirees who participated in the NPS since its inception in 2013 have not received their entitled benefits. Similarly, families of deceased employees have been deprived of their due benefits.

Every month, 10 percent of employees’ salaries are deducted for NPS contributions, with an additional 10 percent contributed by the management. However, amid severe financial pressures, the management chose to utilize these funds for other operational needs, exacerbating the pension fund deficit.

The situation is compounded by the management’s mishandling of employees’ salary deductions, impacting their credit scores adversely. Furthermore, since the 2021 pay revision, employees have not received any dearness allowance (DA), only annual increments.

Additionally, KSRTC faces challenges from Non-Departmental Recovery (NDR) loans taken by employees from cooperative banks, with repayments deducted directly from their salaries.

These financial irregularities highlight the critical need for immediate resolution to ensure employees receive their rightful pensions and benefits, as promised under the NPS scheme.

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