OPS vs NPS: What will be the old pension scheme restored? Nirmala Sitharaman gave great information

The Central Government has not under consideration to restore the Old Pension Scheme (OPS) for central employees under the National Pension System (NPS). Finance Minister Nirmala Sitharaman gave information about this.

The government said in Parliament on Monday that no proposal is under consideration with the Central Pension Scheme (OPS) restoring the Old Pension Scheme (OPS) for central government employees under the National Pension System (NPS). Finance Minister Nirmala Sitharaman said in a written reply to a question in the Lok Sabha that the government had distanced himself from OPS due to extreme fiscal burden on the government treasury.

What NPS

NPS is a contribution-based scheme, which was launched on or after January 1, 2004 for central government employees (except armed forces) joining the service.

He said that a committee was constituted under the chairmanship of the then Finance Secretary to suggest measures to amend the NPS with the aim of improving pension related benefits for such employees.

In response, it is said that based on the committee’s consultation with the stakeholders, the Integrated Pension Scheme (UPS) was introduced as an alternative to the NPS, which aims to provide the prescribed benefits to the central government employees brought under NPS.

The Finance Minister said that the characteristics of UPS, including the definition of family, have been prepared in such a way that the payment should be ensured as well as the financial stability of the fund.

He said that in the event of death or disabilities free on the basis of death or disability, the government employees who opt for UPS under NPS will also be eligible for the option to get benefits under the CCS (Pension) Rules, 2021 or CCS (Exceptional Pension) Rules, 2023.

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Sitharaman said that UPS was introduced by the government on 24 January 2025 as an option under NPS through a notification. The minister stated in the written reply to another question that from March 2020 to March 2024, domestic financial liabilities have increased by about 5.5 percent, while domestic financial assets have increased by 20.7 per cent during the same period.

In addition, he said that according to the latest data published by the National Statistics Office (NSO) of the Ministry of Statistics and Program Implementation, Pure Financial Savings in 2022-23 has increased from Rs 13.3 lakh crore to Rs 15.5 lakh crore in 2023-24, so it is not a matter of systemic concern for the asset quality of Indian banks. Language edited by: Sudhir Sharma