A Comptroller and Auditor General audit has found that Rs 3,277.58 crore in pension contributions deducted from Maharashtra government employees, along with the state's matching share, had not reached the National Pension System trustee for investment as on 31 March 2025.
The state deducts 10% of basic pay and dearness allowance from employees under the NPS and adds 14% as its own matching contribution. This combined amount is meant to move to the National Securities Depository Limited (NSDL), the designated trustee, without delay so it starts earning market-linked returns.
Instead, according to the CAG's State Finances Audit Report for 2024-25, the money remained in the state's Public Account under a head meant only as a brief transit point.
The account in question, Major Head 8342-117, was meant to be a brief stopover for pension money on its way to NSDL. The CAG's data show it has functioned instead as a long-term parking lot for over a decade. The balance peaked at Rs 10,642.26 crore in 2020-21 and has come down since.
Government Underpaid Its Own Contribution Too
For 2024-25, employees contributed Rs 2,578.43 crore to their NPS accounts. The government was required to match this with 14% of basic pay and dearness allowance as its own share. Its actual contribution fell short by Rs 222.97 crore.
This means that separately from the delay in remitting funds, the government did not contribute its full matching amount for the year. The CAG treats this as a distinct compliance issue and notes it resulted in an understatement of the state's revenue expenditure by the same amount.
The Ministry of Finance prohibited parking NPS contributions under this account head in a September 2008 circular, which stated that no contributions should be held there "even as a temporary measure."
Total contributions for the year came to Rs 5,843.20 crore, of which the government transferred Rs 7,071.02 crore to the Public Account, a figure that includes Rs 99.67 crore in accumulated interest and a separate Rs 65.67 crore from employees on foreign service.
The scheme applies to anyone who joined Maharashtra government service, aided schools and colleges, non-agricultural universities, Zilla Parishads or Water Resources Department corporations on or after 1 November 2005.
The state adopted the NPS architecture in October 2005 and formally rolled out the Defined Contribution Pension Scheme for these employees in August 2014, nine years after the cutoff date it applies to.
The report frames this as a compliance failure with no ambiguity. It says continued parking "undermines the integrity of the NPS architecture" and delays investment of both employee and government contributions, "potentially depriving subscribers of timely market-linked returns." The recommendation is for the state to ensure prompt transfer to NSDL and close the shortfall in its own contribution.
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