OPS vs NPS: Govt plans to make changes in new pension scheme on lines with old pension scheme

OPS vs NPS: Under the OPS, retired government employees received 50 per cent of their last drawn salary as monthly pensions. The amount keeps increasing with the hike in the DA rates.

NPS has been made available to every Indian citizen from May 1, 2009, on a voluntary basis. Photo credit: Pixabay

OPS vs NPS: With the aim of making the new pension scheme (NPS) more lucrative, the government has formed a committee. The new committee under the finance secretary will try to address the concerns of employees and make changes in the NPS accordingly. This will be done while making sure that fiscal prudence is maintained.

Union Finance Minister Nirmala Sitharaman, while moving the Finance Bill 2023 for consideration and passage in the Lok Sabha, said the new approach to the new pension scheme will be designed for adoption by both central and state governments.

"I propose to set up a committee under the finance secretary to look into the issue of pensions and evolve an approach which addresses the needs of employees while maintaining fiscal prudence to protect common citizens," she said.

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"The approach will be designed for adoption by both the central government and state governments," she further said.

The formation of the new committee comes in the backdrop of several non-BJP states deciding to revert to the dearness allowance-linked old pension scheme. Some employee organisations in other states are also raising demand for the same.

States like Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have already the Central government about their decision to revert to the old pension scheme. Moreover, they have also requested a refund of the corpus accumulated under the NPS.

Will the old pension scheme be restored?

The central government has already informed the Parliament that it is not considering any proposal to restore the OPS in respect of the central government employees recruited after January 1, 2004.

Speaking on the announcement, Information and Broadcasting Minister Anurag Thakur said the committee will look at various suggestions on the NPS-OPS issue.

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This is the right step which will keep in mind the benefit of employees as well as fiscal prudence, Thakur added.

Benefits of the old pension scheme

Under the OPS, retired government employees received 50 per cent of their last drawn salary as monthly pensions. The amount keeps increasing with the hike in the DA rates.

The total assets under management under the National Pension System and Atal Pension Yojana stood at Rs 8.81 lakh crore as on March 4, 2023. NPS has been implemented for all government employees except those in the armed forces joining the central government on or after January 1, 2004. Most of the state/ Union Territory governments have also notified the NPS of their new employees.

According to the PFRDA (Pension Fund Regulatory and Development Authority), 26 state governments, with the exception of Tamil Nadu and West Bengal, have notified and implemented NPS for their employees.

NPS has been made available to every Indian citizen from May 1, 2009, on a voluntary basis.

Further, on June 1, 2015, the Atal Pension Yojana was launched, which has given the much-required impetus to the social security schemes.

With PTI Inputs

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