NPS: A fresh controversy has surfaced regarding the National Pension System (NPS) investments and returns of central government employees. Manjeet Singh Patel, the president of the All India New Pension Scheme Employees Federation (AINPSEF), has written to Prime Minister Narendra Modi requesting a thorough investigation into the operations of the NPS Trust. Allegations of financial irregularities, negligence, and conflicts of interest in managing the pension fund have been made by the organization, but these claims await independent verification.
Patel urged the Comptroller and Auditor General of India (CAG) to audit the NPS Trust and hold accountable those responsible. He highlighted that the poor performance of the stock market has adversely affected employees’ NPS investments, resulting in negative returns. Consequently, he proposed that the government should consider ensuring a minimum of 8.25% annual return on employee contributions, a rate similar to that of the Employees’ Provident Fund Organization (EPFO), which is presently not guaranteed under the NPS.
Key Points about NPS
– Concerns raised over a Rs 17,000 crore investment in startups
– Questions about a delay in investing Rs 800 crore
– Allegations of conflict of interest within the NPS Trust
– AINPSEF’s 6 main demands from PM Modi
AINPSEF questioned the decision to invest around Rs 17,000 crore in alternative investment funds, private equity, venture capital, and startups on NPS Day, October 1, 2026. Patel expressed reservations about the risks associated with such investments that do not assure guaranteed returns for employees. Specific entities like Alteria Capital and Trifecta Capital were mentioned, and a call for an inquiry into these investment choices was made.
Furthermore, the letter addressed concerns about a symbolic Rs 400 crore check presented by the NPS Trust for investments involving Trifecta and Alteria on that day. The organization raised doubts about the rationale behind investing such a substantial amount in risky ventures when assured minimum returns for pension funds are lacking. It emphasized the importance of revealing the exact terms of the investments, approvals obtained, and risk management strategies in place.
Another issue highlighted was the delay in investing Rs 800 crore that the Finance Ministry deposited into the Unified Pension Scheme (UPS) pool corpus on July 8, 2026, which was not utilized until July 16, resulting in an alleged interest loss exceeding Rs 2 crore. Patel questioned who would be held accountable for this claimed loss and demanded compensation.
AINPSEF also scrutinized the fees paid to the NPS Trust, pension fund managers, and central recordkeeping agencies, pointing out that substantial amounts are transferred annually from employees’ pension funds. Despite these fees, the organization asserted that there is inadequate oversight of investment outcomes and accountability. Official verification of these figures and allegations is deemed necessary.
The letter also raised concerns about potential conflicts of interest involving NPS Trust Chairman Dinesh Kumar Khara’s roles in various organizations, such as CRISIL and K-Fintech. Allegations of conflicts of interest between positions related to pension fund supervision, benchmarking, and record management were mentioned, necessitating a closer examination.
Moreover, the letter highlighted the non-implementation of the Minimum Assured Return Scheme (MARS) and called for the publication of the findings of the high-level committee formed in January 2026 regarding MARS.
AINPSEF brought attention to delays in receiving UPS pensions due to minor issues in employees’ files, causing setbacks in pension disbursements. The organization urged authorities to streamline the process and expedite the resolution of pending cases to ensure retired employees receive their pensions promptly.
AINPSEF’s 6 main requests to PM Modi included:
1. Conducting an unbiased audit of the NPS Trust, private advisors’ appointments, and AIF investments by the CAG.
2. Immediate dissolution of the NPS Trust and transferring pension fund oversight to a statutory public body or the CAG.
3- Compensation for losses:- The losses caused due to alleged delay in investment of UPS pool corpus amounting to Rs 800 crore should be compensated.
4- 8.25% minimum return:- Minimum return should be ensured on the employees’ contribution on the lines of EPFO.
5- Option to choose NPS or UPS:- Employees should have the option to choose between the two schemes during their service period.
6- Prevention of conflict of interest:- Accountability should be fixed by removing the possible conflict of interest between the concerned officials and private institutions.
Currently, these demands are part of a letter sent to the Prime Minister by the employee organization. The future course of action will only become clear after an official response to these allegations from the NPS Trust or the relevant regulator, and confirmation of any action by the government. Investments in NPS are market-linked, so the demand for an 8.25% return should not be interpreted as a current guarantee.