Around 90,000 new Central Government employees are already part of the New Pension Scheme, whereby 10 per cent of their salary is deducted as employees’ contribution and the Government makes a matching contribution.

Since the PFRDA Bill that was aimed at putting in place a comprehensive system for managing the retirement funds of Government employees as well as informal sector workers previously uncovered by any social security scheme is yet to become a law, the money contributed by the new employees are lying idle.

Official sources told The Indian Express that close to Rs 150 crore has been accumulated so far under the New Pension Scheme from Central Government employees alone. The Cabinet note prepared by the Finance Ministry lays out the various alternatives available for managing this money for the CCEA’s consideration. Currently, in the absence of an investment mechanism, the funds are being credited with 8 per cent interest in line with the Government Provident Fund rate.

The CCEA has to pick one of three options. The first option is to treat these pension savings just like the Government provident fund — simply make book entries crediting employees’ pension accounts without actually funding them immediately. The second option is to blindly invest the money in Government securities, irrespective of the returns they generate.

The third and final option before the CCEA would be to adopt the investment pattern prescribed by the Finance Ministry for all recognised non-Government provident funds, including the Employees’ Provident Fund Organisation. The Finance Ministry is likely to push for this option, that would entail investing the bulk of the money in Central and state government securities and PSU bonds. Up to 10 per cent of the money may be put in bonds of private sector companies that have an investment grade rating from at least two credit rating agencies, while a maximum of 5 per cent may be put in equity shares of similar companies.