The government on Tuesday said it was not considering 100 per cent foreign direct investment in the pension sector.
This was stated by Minister of State for Finance S S Palanimanickam in a written reply to Rajya Sabha.
To a question on whether a private pension scheme was being introduced for central government employees who have joined after January 1, 2004, he said a new restructured defined contribution pension system 'is mandatory' for all those, excluding Armed Forces, in the first stage.
The monthly contribution is 10 per cent of the salary and dearness allowance of the employee and matched by the central government contribution.
However, pension liability of all existing pensioners as well as those employees who were in service on December 31, 2003 would remain with the Centre, the minister said.
"The new pension system is not applicable to existing pensioners," Palanimanickam said.
To another query on whether the Employees Pension Scheme, one of the constituents of Employees Provident Fund coverage, had an 'unfunded' gap of Rs 17,500 crore (Rs 175 billion), he said an actuarial
report revealed that in the long run (say in about 40 years), there may be a deficit in the fund.
The 7th valuation report (up to March 31, 2003) has been submitted by the actuary and is being placed before the Central Board of Trustees of Employees Provident Fund Organisation, he said, adding accordingly, the actuary had recommended certain measures to check the shortfall.