Govt. say no to reintroduction of Old Pension Scheme
Govt. replaced the Old Pension Scheme with National Pension Scheme (NPS) in 2004. Initially it was mandatory for Central Govt. Employees but subsequently extended to State Govt. Employees and other Public Sector and Private Sector employees also.
Currently NPS is also applicable for Public Sector Bank Employees.
Employees have been demanding pre-2004 pension scheme as the pension amount is lower and uncertain under the new scheme (NPS).
However, in a written reply to a question asked in the Lok Sabha, the Government ruled out reintroduction of Old Pension Scheme (OPS) for government employees.
“Due to rising and unsustainable pension bill, the government had made a conscious move to shift from the defined benefit, pay-as-you-go pension scheme to defined contribution pension scheme now called as National Pension System (NPS),” Minister of State for Finance Anurag Thakur said.
Some government employee organizations have consistently opposed the NPS since it does not provide a fixed pension amount. There was an expectation from some sections that government may reintroduce OPS for Central Government employees based on this opposition.
Under the old pension scheme, the entire pension amount was borne by the government while fixed returns were guaranteed for an employee contribution to the General Provident Fund.
While pension is not fixed in NPS and is dependent on market as the corpus is invested in securities (Bonds/ Shares etc.)