Performance Audit on Key Entities and Schemes in the Pension Sector, Department of Financial Services

Findings

1. Pradhan Mantri Shram Yogi Maandhan had 44.92 lakh subscribers as of 31 March 2024 against a target of 10 crore by March 2023, and Pradhan Mantri Kisan Maandhan had 19.49 lakh against a target of five crore by 2021-22.

   “Till 31 March 2024, 44.92 lakh subscribers had subscribed to PMSYM, against the target of 10 crore subscribers by end of March 2023. In PMKMY, till 31 March 2024, the enrolment in the Scheme was 19.49 lakh subscribers, against the target of five crore subscribers upto 2021-22.”Executive Summary

2. Atal Pension Yojana's initial target of two crore subscribers by December 2015 was reached only in 2020, five years late, and about 51 per cent of accounts had subscribers still persisting in the scheme as of 31 March 2024; inadequate verification also let ineligible subscribers in.

   “In APY, the initial target to enrol two crore population by December 2015, was achieved by 2020, after delay of five years. Out of the total number of APY accounts, the proportion of subscribers persisting in the scheme stood at around 51 per cent as of 31 March 2024. Inadequate verification in APY further resulted in enrolment of ineligible subscribers.”Executive Summary

3. Because there was no unique primary identifier when the schemes started, multiple accounts ended up linked to single bank accounts across Atal Pension Yojana, Shram Yogi Maandhan and Kisan Maandhan.

   “The absence of a unique primary identifier during initial implementation led to multiple accounts being linked to single bank accounts across APY, PMSYM, and PMKMY.”Executive Summary

4. Unlike Atal Pension Yojana, no actuarial valuation of the pension fund was carried out for Shram Yogi Maandhan or Kisan Maandhan.

   “Unlike APY, actuarial valuation of pension fund was not carried out in PMSYM and PMKMY.”Executive Summary

5. The regulator was also the appointing authority for the CEO and trustees of the body it regulates — PFRDA appointed NPS Trust's officers and the scheme's intermediaries, with no arm's length relationship.

   “PFRDA was a regulator as well as the appointing authority of the CEO and trustees of NPS Trust. While being the regulator, PFRDA appointed intermediaries (entities involved in the NPS architecture) and did not have an arm's length relationship with NPS Trust. Similarly, the Finance, Investment and Audit Committee of EPFO selected portfolio managers and allocated funds among them, while also overseeing and inspecting their activities.”Executive Summary

6. The Coal Mines Provident Fund Organisation held ₹12,130.91 crore in suspense accounts at the end of 2023-24 that had not been posted to individual members' ledgers, and in the Seamen's fund contributions for over 28,000 subscribers remained unposted, denying them interest.

   “CMPFO held an amount of ₹12,130.91 crore in suspense accounts, at the end of 2023-24, which was yet to be posted to individual ledgers. Accounting lapses were observed in SPFO, where contributions for over 28,000 subscribers remained unposted, denying them interest credits.”Executive Summary

7. In the Assam tea employees' fund, between 59 and 90 per cent of family pension claims were outstanding at the end of every year from 2017-18 to 2023-24, and 99 to 100 per cent of the claims that were settled breached the 30-day timeline.

   “In ATEPFO, in respect of family pension claims, 59 per cent to 90 per cent of the claims were outstanding at the end of every year during 2017-18 to 2023-24 in ATEPFO and 99-100 per cent of claims which were settled had breached the timeline of 30 days.”Executive Summary

8. The Minimum Assured Return Scheme the pension law provides for had still not been implemented by PFRDA's fund managers, and the Employees Provident Fund wage ceiling of ₹15,000 had not been revised since September 2014.

   “minimum assured returns as may be notified by PFRDA. However, Minimum Assured Return Scheme (MARS) was yet to be implemented by PFRDA's pension fund managers. In case of EPFO, the wage ceiling of ₹15,000 was last revised in September 2014.”Executive Summary

9. In Pradhan Mantri Vaya Vandana Yojana, no memorandum of understanding setting out the roles of LIC and the department was ever signed, 98 per cent of the portfolio was in government securities against a 60-70 per cent limit, ₹5,437.74 crore was in securities beyond the 15-year tenure limit, and 1,793 subscribers held more than the ₹15 lakh cap.

   “Memorandum of Understanding including the roles and responsibilities of LIC and DFS, was not signed between them for implementation of Pradhan Mantri Vaya Vandana Yojana (PMVVY). As of March 2023, PMVVY portfolio witnessed 98 per cent of funds being invested in Government securities (against the 60-70 per cent limit), and funds of ₹5,437.74 crore invested in securities with tenures exceeding the 15-year limit… However, in 1,793 subscribers the total purchase price had surpassed the stipulated limit of ₹15 lakh.”Executive Summary

Fact-checks citing this report

• ◑Lacks contextWe will ensure that the interests of labour in the unorganized sector are protected… issue identity cards to the unorganized sector labourers, and arrangements will be made to provide them good quality health and education services… strengthen the Pension and Health Insurance safety nets for all kinds of labourers.
• ✕Not supported by auditPension for small and marginal farmers — We will launch a pension scheme for all small and marginal farmers in the country so as to ensure social security to them on reaching 60 years of age… We will expand the Pradhan Mantri Shram Yogi Maandhan scheme to cover all small shopkeepers… Ensure comprehensive social security coverage for all unorganised labourers including insurance, pension etc.