CAG said the high-level expert group (HLEC) had recommended way back in 2002 to have an actuarial evaluation of the funds, once in two years
The Comptroller and Auditor General of India (CAG) flagged the lack of evaluation of funds and schemes under the National Pension System (NPS) for government employees. Without such evaluation, there is no guarantee of viability of these schemes, CAG
said in its report on NPS presented to Parliament on Wednesday.
said the high level expert group (HLEC) had recommended in 2002 that there should be an actuarial evaluation of the funds once in two years as the government might like to rationalise the benefit structure or increase the contribution rate as the case might be.
“From the documents, responses made available to audit, it was observed that there was no indication whether the HLEG recommendations were accepted or not,” it said. When asked about this, the Department of Financial Services (DFS) replied that the HLEG was set up by the Department of Pension and Pensioners’ Welfare (DoPPW) and the information about the recommendation was not traceable in DFS records.
However, DFS did not provide a specific reply with regard to actuarial evaluation once in two years and adoption of any other mechanism to assess the viability of the fund or scheme.
“Thus, the audit could not draw assurance on viability of the fund/scheme. This assumes importance in view of the fact that the actuarial evaluation is at the core of any pension scheme,” CAG
said. It said total assets under management (AUM) amounted to Rs 3.99 trillion as of January 31, with Rs 3.41 trillion pertaining to the government sector — both the Centre and states. DFS in its reply also stated that a review of NPS’s performance vis-à-vis the expected outcomes and standards envisaged at inception, and the way forward is under consideration. DFS said it intended to conduct actuarial evaluation to assess the situation.