Funds deposited for NPS cannot be transferred to state governments: Centre

Finance minister Nirmala Sitharaman on Monday made it clear that funds deposited for the National Pension Scheme (NPS) cannot be given to state governments as per the current laws, rejecting a suggestion by Rajasthan chief minister Ashok Gehlot. Funds deposited for NPS cannot be returned to any state as they belong to the subscribers, Sitharaman said.

"If one state expects that the funds deposited with the EPFO (Employees' Provident Fund Organisation) should be given to the states, if this is the expectation, then no. Employees have the entitlement to the money," she said. "The deposited money is earning interest and there should be clarity that the money comes into the hand (of employees) post-retirement."


It is impossible that the money deposited will come into the hands of the government, Sitharaman said.

Gehlot had, citing the recent crash of Adani Group shares, recently said employees of the state government cannot be left at the mercy of the share market where NPS funds are invested.

Vivek Joshi, secretary at the Department of Financial Services, said law prescribes that money deposited under NPS belongs to employees based on agreement between employee and the NPS trust.