24/06/2023
What is the Old Pension Scheme (OPS)?
The Old Pension Scheme (OPS) is a retirement scheme approved by the government. Government employees receive a monthly pension under the OPS. It provides a guaranteed pension for government employees who have completed at least ten years of service based on their last drawn basic salary and the years of service.
Under the OPS, the government pays the entire pension amount to government employees after retirement. Thus, no amount is deducted from employees’ salaries when they are in service.
After retirement, government employees receive the pension amount and the benefit of the revision of Dearness Allowance (DA) twice a year. Since they receive pensions based on their last drawn salary plus DA, their pensions increase when the DA increases twice a year. However, OPS applies only to government employees.
Introduction of the National Pension Scheme (NPS)
However, the National Democratic Alliance (NDA) government discontinued the OPS in 2004 and introduced the National Pension Scheme (NPS) for government employees. The government extended the scope of NPS for all citizens, including self-employed and unorganised workers, in 2009. It is a pension scheme where citizens can contribute an amount every month till 60 years and receive a pension after retirement.
The government launched the NPS as an alternative to the existing OPS to provide citizens with a secure and stable retirement income. However, it is a voluntary scheme administered by the Pension Fund Regulatory and Development Authority (PFRDA).
Under the NPS, government employees can contribute 10% of their basic salary plus Dearness Allowance (DA), and the government contributes 14% of the basic salary plus DA every month. Other citizens can contribute a minimum of Rs.500 monthly towards NPS.
we want OPS (old pension system)
