CAG and PAC reports flag irregularities, delays, and fund transfer issues in Nagaland National Pension System amid OPS restoration demands.
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KOHIMA — Amid repeated agitations by the Nagaland National Pension System Government Service Employees Forum (NNPSGSEF) demanding restoration of the Old Pension System (OPS) and scrapping of the National Pension System, official audit findings and legislative committee observations have brought renewed focus on the implementation and management of the NPS in the state.
According to the report of the Comptroller and Auditor General of India in Finance Accounts Volume-I for 2024–25, state government employees recruited on or after January 1, 2010 are covered under the NPS, a defined contribution pension scheme.
Under the system, employees contribute 10 per cent of their monthly salary, while the state government contributes 14 per cent. The total contribution is to be transferred to designated fund managers through the National Securities Depository Limited / Trustee Bank.
During the financial year 2024–25, the total contribution to NPS stood at INR 483.38 crore. This included INR 183.12 crore from employees, INR 291.79 crore from the government, INR 2.90 crore as penal interest, and INR 5.57 crore as service charges.
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The report noted that government contribution under the defined contribution pension scheme (state fund expenditure) declined to INR 29,179.06 lakh in 2024–25 from INR 40,724.90 lakh in 2023–24, marking a decrease of 28.35 per cent.
Similarly, payment of service charges to NSDL decreased by 23.62 per cent, from INR 729.31 lakh in 2023–24 to INR 557.05 lakh in 2024–25.
The state government transferred INR 2,502.62 crore from the Public Account (Major Head 8342-117) to NSDL during the year, of which INR 19.24 crore pertained to previous years.
However, as of March 31, 2025, INR 72.75 crore remained untransferred to NSDL, resulting in an overstatement of the state’s cash balance to that extent.
PAC flags several irregularities
Meanwhile, the Public Accounts Committee (PAC) of the Nagaland Legislative Assembly, in its 145th Report (2025–26) based on examination of the CAG Audit Report for 2020–21, highlighted several irregularities and delays in NPS implementation.
The report stated that as of March 31, 2021, a total of 27,432 employees were under NPS, but only 1,540 had been allotted Permanent Retirement Account Numbers (PRAN), leaving 25,892 employees without PRAN. The delay was attributed to late submission of registration forms by drawing and disbursing officers (DDOs), along with incomplete documentation.
However, the department informed that the situation improved significantly, with 32,111 PRANs generated as of April 15, 2023. It added that the backlog has been reduced to 983 employees, although some level of pending cases is expected due to the continuous recruitment process.
The PAC report also flagged a short contribution of INR 142.23 crore by the state government towards the Defined Contribution Pension Scheme (DCPS), noting that it understated the fiscal deficit while overstating revenue surplus. However, the department maintained that there was no shortfall, stating that government contributions were made based on employee contribution statements received.
Further, the audit pointed out delays in transferring NPS funds to NSDL. During 2020–21, only INR 224.59 crore was transferred to NSDL/Trustee Bank, resulting in a shortfall of INR 157.49 crore. Additionally, INR 185.61 crore remained outstanding under the scheme as of March 31, 2021, despite being reflected in accounts.
Responding to audit queries, the department attributed delays to late submission of NPS records by various departments. It also informed that the adoption of the eNPS (online) module has improved the speed of fund transfers, replacing the earlier manual process.
Providing updated figures, the department stated that funds transferred to NSDL increased from INR 654.26 crore as of March 31, 2021 to INR 1,380.38 crore as of April 15, 2023, indicating progress in clearing backlogs.
In its observations, the PAC expressed concern over delayed transfers and short contributions, stating that such lapses lead to understated fiscal deficit and accumulation of liabilities, including interest obligations.
The Committee recommended that the state government fulfil its obligations by clearing arrears of contributions and ensuring timely transfer of funds to NSDL.
It emphasised that prompt remittance is necessary to safeguard employee benefits and avoid future financial liabilities under the NPS.
The findings come at a time when state government employees continue to press for a rollback to the OPS, citing concerns over fund management, delays, and uncertainty associated with the NPS.