The Kerala government has directed State universities to establish pension funds to shoulder pensions and retirement benefits. While hinting a withdrawal from footing pension bills, the Finance department has permitted universities to borrow from banks to tide over fiscal crises.
The move could pave the way for an increase in various fees charged by universities that are estimated to have nearly 13,000 pensioners on their rolls. The increase in the number of universities has led to a gradual dwindling of resources for each.
Pension dues are currently disbursed from the non-plan grants provided by the government to universities. However, the Finance department has insisted on instituting pension funds to prevent an eventual disruption of pension disbursal in the future. No university in the State has given shape to a pension fund despite the University Acts containing provisions for the same, an order issued by the department has stated.
According to the order, 25% of the upper limit in the salary scales of each employee covered by the pension scheme will go towards the pension fund within the 10th day of each month.
While 10% of the amount can be derived from the annual grants provided by the government, the remaining 15% must be borne by the universities from their own funds. The existing allocations made by each university for pension purposes must be diverted to the fund. Pension contributions received whenever an employee goes on deputation will also be transferred to the fund.
The pension fund will be monitored by a board comprising the finance officer of the university concerned, joint director of the university audit wing, and one representative each from the Finance and Higher Education departments who are not below the rank of deputy secretary.
While universities have been instructed to open treasury accounts for the pension funds, they have been permitted to park them in banks of financial institutions that guarantee high interests.
Universities have also been allowed to avail themselves of loans at low interest rates from banks or government-controlled financial institutions to meet expenses. The interest amount can be paid from the pension fund.
