What will be the loss of breaking the NPS Agreement, the Finance Department has sought advice from the Law Department on three points

To implement the old pension scheme in Himachal, the state government will have to break the NPS agreement. What will be the side effects of a breach of the agreement? The Finance Department has now sought the opinion of the Law Department in this regard.

A copy of the PFRDA Act has also been sent in the file along with a copy of the NPS Agreement signed with the Central Government on March 22, 2010.

On the basis of these two legal documents, the Law Department needs advice as to whether there will be any loss to the state after going to old pension. What are the legal options available with the state?

NPS was implemented in Himachal with effect from 15-05-2003, the decision regarding which was taken by the then Government on 17-08-2006. This means that Virbhadra Singh government had implemented NPS in Himachal and the agreement to come to NPS was signed during the time of the Dhumal government.

The agreement was signed on behalf of the state government by the then Special Secretary Finance Akshay Sood, who is now the Finance Secretary. It was signed by NR Rayudu, CEO of, NPS on behalf of the Government of India. Two other witnesses were also from the Government of India.

There is no exit clause in this agreement. Clause-03 states that the state government has fully understood the NPS structure and the state is in complete agreement with this arrangement of the Government of India.

On this basis, Himachal had made the Himachal Pradesh Civil Services Contributory Pension Rules-2006. There will be a change in these rules for old pension. In this agreement, the state government had given a guarantee that it would fulfill every commitment of NPS.

Clause 10 of the agreement provides that if the state does not agree to any of the provisions, the matter shall be referred to the PFRDA and thereafter an arbitrator shall be appointed.

Now because the Sukhu government has decided to implement old pension, the government does not even have the option of going to arbitration.

The File has not yet Returned from the Law Department

Clause 11 of the NPS Agreement states that any dispute shall be subject to the jurisdiction of Delhi Courts only. Clause 13 provides that the State Government cannot transfer any responsibility relating to NPS under the agreement.

The file has not yet been returned from the Law Department, so the matter of old pension will not be discussed in the cabinet meeting on February 16.

This is the Answer of the Center

The Finance Department of the Himachal Government had written a letter to the Government of India to return the 14% contribution of the State Government before taking the decision to implement the old pension.

In response to this, PFRDA had said that no such provision is there in the agreement, hence the money cannot be refunded. This money will be given to the employee only on retirement. After this, the Finance Department has sent a letter to the Union Finance Ministry.

The answer has not come yet. According to the decision taken in the first cabinet on January 13, the office memorandum has also been sent separately to PFRDA. There has been no response on this either.

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