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Govt makes opening GPF accounts mandatory for NPS employees

Srinagar, Feb 06: The J&K government has made the opening of General Provident Fund (GPF) accounts mandatory to all its employees, who were appointed on or after January 01 2010, even as they already have similar accounts with Government of India under New Pension Scheme (NPS).

Director General J&K Funds Organisation in a recent communiqué to Joint Directors of both Srinagar and Jammu has asked them to circulate among all the departments the devised format of capturing employees’ information for opening new GPF accounts.

 

“…the circulation of the format be given top priority for facilitation and early updation of GP Fund account numbers at District level offices,” reads the communiqué.

The decision is based on the recent amendment the J&K Governor NN Vohra made to J&K Civil Services Regulations, 1956.

Vohra brought the change on January 11, in the form of SRO 12 as per which “It shall be compulsory for the employees to have G.P. Fund accounts with assigned G.P. Fund numbers. Deduction towards G.P.Fund Contribution from the government servants…who are on the new pension scheme, shall be allowed on voluntary basis.”

The change, however, is baffling such employees, who number in tens of thousands.

“I don’t understand if I already have a similar account under NPS, why am I being forced to open a new account,” said one mid-rung employee of Srinagar Municipal Corporation not revealing his name.

“In 2010, when we were hired, we had protested that we should not be brought under NPS and should have the regular GPF accounts. But the administration then did not allow us the same. And now they are asking us to open the accounts without giving reasons any reasons,” he said.

Another employee of Education Department said the move had confused all and sundry.

“Having a GPF account earlier meant that you were a part of the old pension scheme. But then the Government of India brought NPS. And it all ended. Now the state government is again bringing GPF, obviously without the pension benefits. Why is it doing so?” he asked.

An unconfirmed source in the General Funds Organisation claims the move was to accommodate the 7th Pay Commission arrears the state government owes to its employees since January 2016.

“The accumulated arrears are a huge amount. And the government is supposed to pay them in cash to its employees. However, it does not have the money to pay them in the lump sum. So, they (employees hired post-January 2010) have been asked to open GPF accounts and the money shall be trickled in it in installments,” the source said.

Under NPS, the Government provides a matching share to the deductions from the salary of the employee which is remitted into a twelve digit unique account number maintained by National Securities Depository Limited (NSDL).

Director General J&K Funds Organisations, Dr Muhammad Ishaq Wani, who is also DG Accounts and Treasuries, told The Kashmir Monitor that the move “was beneficial” and many employees under NPS “actually wanted it”.

“Under NPS tier I, which is applicable in J&K, one is not able to withdraw the money. So we have now given this option to such employees to contribute and save money in GPF accounts where withdrawals are easier,” he said.

Dr Wani said that J&K was not brought under NPS tier II, which offers greater flexibility in terms of withdrawal rules.

“So consider this as a sort of Tier II for government employees,” he said.

Asked if the 7th Pay Commission arrears would also be deposited in them, he said: “It may, it may not happen. I cannot comment on it as of now.”