OPS Vs NPS: Finance Ministry Clears The Air Amid Demands For Restoring Old Pension Scheme

The Finance Ministry has clarified that it is not considering to restore the Old Pension Scheme for its employees who are covered under the National Pension Scheme and Unified Pension Scheme.

The ministry's clarification comes in the backdrop of demands for the restoration of OPS by multiple associations representing central government employees.

In a written reply before the Lok Sabha on Monday, Pankaj Chaudhary, Minister of State for Finance wrote, "There is no proposal under consideration by the government for the restoration of the Old Pension Scheme (OPS) in respect of central government employees covered under the National Pension System (NPS) or Unified Pension Scheme (UPS)".

Chaudhary's reply was to the questions surrounding government's stance over the issue raised by Members of Parliament Anto Antony, Amra Ram, Utkarsh Varma Madhur, and Imran Masood. The members had also inquired about whether OPS will be implemented by abolishing NPS and UPS.

The Old Pension Scheme or OPS is a non-contributory assured pension framework under the Central Civil Services Pension Rules, 1972 (now 2021).

In contrast to this, NPS and UPS are contributory pension schemes sponsored by the central government, which entail employees contributing 10% of their basic pay and dearness allowance for retirement.

Various central government employee associations have been demanding restoration of the OPS.

The government adds 14% of an employee's basic pay and DA under the NPS, while under the UPS framework, in addition to 10% of the employee's basic pay and DA, another 8.5% of the employees' total corpus is included.

In the Lok Sabha, questions were also raised around whether state governments have implemented OPS for their employees.

To this, MoS Chaudhary answered that certain states like Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have informed PFRDA (Pension Fund Regulatory and Development Authority) about their decision to restart OPS for their state government employees.

"There is no provision in which the accumulated corpus of the subscribers viz government contribution, employees' contribution towards NPS, along with accruals, can be refunded and deposited back to the state government", Chaudhary clarified while citing the the PFRDA Act, 2013 and other regulations.